Standard & Poor's Risk Solutions is increasingly being asked by banks, regulators and others, how Standard & Poor's rating default and migration data can be effectively used within a bank’s Internal Ratings System; in particular, interest focuses on the circumstances under which a mapping of a bank's internal rating scale to Standard & Poor's scale supports the use of Standard & Poor's ratings default data to supplement a lack of sufficient default data within the bank.
Basel II: Responding to a Whole New World of Risk
(reprinted from the September, 2006 issue of USBanker)
(reprinted from the September, 2006 issue of USBanker)
Breaking ranks with the international banking community, U.S. banking agencies announced in late 2005 that U.S. banks will be granted an extension to the January 2007 Basel II compliance deadline previously set by the Bank for International Settlements (BIS), the governing body of the world’s central banks. The staggered compliance dates introduce a host of complex issues and competing interests for regulators and financial market participants.
The U.S. public finance market has traditionally possessed significant stability and sound credit characteristics. The results of Standard & Poor's Ratings Services public finance default and ratings transition studies continue to provide statistical support for this view.
In its quest to provide leadership in clarity and transparency to its investors and issuers through added discipline and analytical rigor of its risk assessment processes, Standard & Poor's Ratings Services has designed a framework and developed criteria to assess the enterprise risk management (ERM) practices of financial institutions.
This criteria builds on Standard and Poor's Policies, Infrastructure, and Methodology (PIM) framework that was constructed to assess the ERM practices of the trading operations of large financial institutions. The structure and components of the framework that has been developed to assess the ERM practices of financial institutions represents what we believe to be "sound practices," not necessarily widely applied in the industry.
In a new report titled "Basel II Spurs Standard & Poor's To Pursue Enhanced Global Comparison Of Capital Ratios", Standard & Poor's says that the forthcoming implementation of Basel II risk-sensitive regulatory capital measures planned for 2007-2009 is a positive development. The associated massive investments in risk measurement systems pave the way for enhanced risk management across global banking systems.
“Thanks to Credit Risk Tracker's level of coverage
and the know-how of Standard & Poor's,
we believe we're on the right path to develop
an internal
rating system
which follows Basel II requirements.”
|
Standard & Poor’s Risk Solutions provides credit risk management solutions focused on assisting financial institutions, corporations and public entities. Risk Solutions Basel Services Suite institutions in meeting the requirements of Basel 1A and Basel II regulations. |
Standard & Poor’s provides credit assessment templates, containing both quantitative and qualitative risk factors, for “hard to rate” sectors where historical data or models are not available. |
|
|
Standard & Poor’s Risk Solutions is committed to delivering advanced credit risk analytics and related custom solutions to financial institutions and corporations seeking competitive, cutting-edge professional services. We offer a comprehensive suite of analytical solutions to assist clients with risk rating parameter estimation, including rating estimates, probability of default (PD), loss given default (LGD) and exposure at default (EAD). |
Standard & Poor’s Risk Data Products offer a comprehensive set of robust and consistent credit default and loss data information that enables reliable assessment of default risk and estimation of potential economic losses for a wide range of exposures. |
|
|
