An active credit portfolio management remains the greatest challenge for banks. The design of their asset side is still more of a random result of the regional composition of their business rather than the result of active portfolio management.
On the other hand, more and more banks create credit treasury departments that embark on actively trading and incorporating risk positions for tradable names. Further, even medium-sized financial institutions consciously diversify their credit portfolio across new asset classes. That this requires a considerable amount of risk assessment know-how has become more than obvious during the latest market turbulences.
_The flexible balance sheet
On the way to an active credit portfolio management some hurdles are to be overcome:
- What are the tasks/competences/responsibilities at the management level and at the transaction level?
- How to organise the risk transfer from customer to portfolio manager within the bank?
- How to manage the retail business in synch with the capital market business?
- To what extent do mark-to-market / mark-to-model approaches give additional management impulses to the credit portfolio?
- Is the current data quality good enough to give reliable management impulses?
- What are the consequences of Basel II, ICAAP and IFRS for the retail and corporate business and business strategy?
The focus of our credit risk management seminar and consultancy offering is the challenge of making the balance sheet agile and to channelling the flood of new regulatory requirements and methods into profitable business practices. Implementation involves three important aspects:
- How to make active credit portfolio management decisions
- How to make use of the numerous reports required by Basel II and ICAAP
- How to successfully calibrate methods and systems
There are three principle implementation steps in portfolio management:
- Optimising the portfolio – spotting potential and using it
- Transferring credit risk using simple means
- Diversifying credit risk using new instruments
_Our range of services: