Whitepapers

25
Mar

Real Estate and Credit Risk – Introduction

This is the first in a series of articles about credit risk considerations related to real estate. In this first article, we discuss some of the general issues and challenges related to real estate in order to set the scene. Subsequent articles will drill down to examine the specific credit...
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24
Mar

Real Estate Data Pooling – Keys to Success

Effective data pooling requires specific, expert knowledge and expertise in a range of integrated functions including: data cleaning, data quality, and quantitative data analysis, expert knowledge led data analysis, credit risk, validation, project management and communications. Many “would be” pool facilitators lack depth and experience in many of these necessary...
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21
Feb

SME and Micro-Finance Credit Assessment Solutions

Some governments are committed to significantly expanding its SME and micro-enterprise sectors within the economy and has proactively taken measures to encourage and facilitate growth and innovation. For banks (and other lending institutions) this provides the opportunity to profitably grow their SME (and micro-finance) businesses provided the challenge of accurately...
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04
Feb

LGD (Loss Given Default) for Defaulted and Distressed Assets – A Best Practice Approach

LGD assessments are required for a variety of purposes including compliance, internal capital allocation, pricing, stress testing and securitisation. For individual assets, each asset will typically also have a number of different (albeit analytically consistent) LGD values at any time– including expected LGD (for IFRS9 accounting), downturn LGD (for Basel...
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13
Jan

Project Finance Regulatory Treatment IRB and IFRS 9

Project Finance – An Introduction. Successful, best practice project finance lending (as well as compliance with regulatory requirements such as Basel and IFRS9) is reliant upon the implementation of a robust, internal credit risk assessment methodology that accurately evaluates PD (probability of default) and LGD (loss given default).
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14
May

IFRS9 – Critical Issues and Possible Solutions – The IRB (Internal Ratings Based) Approach

Introduction and the Need for an IRB (Internal Ratings Based) Approach. In simple terms, IFRS9 requires institutions to account for expected credit losses on an ongoing basis in a manner consistent with the fundamental principles of accounting. By contrast, Basel regulations are intended to ensure financial institutions have sufficient aggregate...
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26
Apr

IFRS9 – Good Risk Management is the Key Driver

Financial institutions have been successfully measuring, quantifying and monitoring credit risk for centuries. Yet, bizarrely, many solutions firms have been suggesting that the IFRS9 accounting standard means the need to discard the proven practices of centuries and instead adopt new models, metrics and processes.
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04
Apr

Data Consortia

A Data Consortium involves a group of financial institutions coming together to pool data, on a confidential basis, to a central repository facilitated and hosted by an independent third-party (such as Risk-Enterprise Limited, “REL”). REL then coordinates and conducts data cleaning and data verification, data aggregation and advanced analysis of...
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