Advisory & Consulting

Credit Risk Management

Credit Risk Management is highly dependent on obtaining accurate and timely credit risk ratings of the counterparties, establishing a strong counterparty risk rating model that can rate various aspects of the counterparty risk (Marco, Financial and Operational) and monitor the risk exposure in real time. A good Credit Risk Management Software that captures the entire lifecycle of the Credit Risk Management is an important aspect of any risk management.

Main Components of Credit Risk Management

Defining the Risk Appetite and Risk Tolerance

Boards of companies should understand the inherent risk in the business model and then establish risk appetites and tolerances and set expectations for management in taking and managing Credit risk

Credit Risk Governance

Boards of financial institutions are ultimately responsible for risk management. To be effective and influential, boards must be properly and regularly informed of institutional risks and trends, as well as the efficacy of risk management policies, processes and practices. This includes:

  • Evaluation of Risk Culture: An institution’s risk standards should be in line with the organization, management reporting, communications, compensation and reward structures. Often, these are not in sync.
  • Policies and Procedures: Proper communication of Policies and their formal communication and adoption is an important aspect of staying within the risk appetite of the firm. When policies are not clearly defined or communicated, there is room for misinterpretation, exposing firms to greater or unknown or undimensioned risks.
Credit Risk Modeling and Monitoring

A number of start-ups as well as small-to-mid-size organizations either do not have Credit Risk Rating Models or the knowledge of Credit Modeling and mitigation. As a result of this, their exclusive business focus makes risk management take a back seat. Management must take a serious look at their risk modeling and counterparty credit sizing to mitigate risk.

Credit Risk Reporting

Risk Reporting has to be current and should provide line managers and risk managers the necessary portfolio intelligence to manage risk and take risk mitigating actions. It should also provide Senior Management and the Board with a snapshot of the portfolio and the risks. RiskCounts' Credit Risk Rating Models can help in this area.

The RiskCounts offerings:

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    Assist in establishing a "Credit Risk Scoring Model", refine the existing model and build a ratings based risk approach to counterparties
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    Assist in establishing a ratings based unsecured risk policy, and establishing a risk monitoring and mitigation framework
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    Help build a comprehensive risk reporting dashboard and provide various levels of reporting for management, regulators, investors and the business line managers
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    Assist in sizing the Capital requirements and provide help with regulatory reporting
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    Review and improve your Credit risk governance processes by evaluating and benchmarking your practices against industry best practices and regulatory expectations. Assist you with making necessary improvements to your existing risk committee structure, its mission, practices, monitoring, reporting and decision making

The RiskCounts Solution:

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    Customized solution to suit every client’s credit risk modeling and ratings management
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    An integrated system that assimilates your internal risk feeds, and provides you with a fully automated ratings of counterparties, assignment of unsecured risk limits, risk monitoring and risk mitigation dashboard
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    Cloud as well as onsite installations
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    Actionable results and complete support with the execution of the capital strategy
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    Best-in-class solution that meets all applicable regulatory guidelines and requirements