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Judgmental Credit Rating System | Reading Assessment Meters | How Screens Work
Moody’s KMV Risk Advisor™ provides institutions with a powerful internal ratings framework specifically designed to facilitate Basel II compliance.
Today, institutions are under growing pressure to increase profitability, shareholder value and the quality of internal ratings. To meet these demands, they will need an improved credit rating system that provides validated, consistent, transparent and accurate risk evaluations within a robust data platform.
The risk/return profile of a loan portfolio is driven by the quality of the decisions of credit analysts, underwriters and risk management professionals throughout an institution. These disparate decisions must be synthesized into a consistent framework where each borrower's financial condition can be frequently updated and its non-financial condition re-evaluated.
Moody's KMV Risk Advisor: Designed to Improve Internal Rating Processes
Moody's KMV Risk Advisor plays a key role in credit ratings systems of financial institutions around the globe, enabling lenders to assess credit risk and facility recovery with greater speed and consistency. Its configurable framework captures, analyzes and stores all the relevant factors in a risk model, reducing costs and bringing transparency and rigor to the rating process.
Beyond helping to ensure better economic credit decisions, Risk Advisor assists institutions in the Basel II implementation process. Many organizations have made Risk Advisor the cornerstone of their IRB compliance activities, saving considerable time and expense of building an internal system from scratch.
Moody's KMV Risk Advisor Offers:
- A framework to synthesize any type of risk factor into standardized internal ratings at both the borrower and facility level
- A secure repository of current risk rating factors
- A robust and secure data archive
- Centralized oversight and increased transparency of the credit process
- Reduced underwriting and review costs through improved efficiency
- A stable technology platform that is managed centrally but can be deployed across a global branch network
Ratings Standardization
- Ability to capture facility, collateral and guarantee detail for loss given default/recovery calculation
- Generates both borrower and facility ratings for public and private firms
- Supports the use of multiple rating models or scorecards on the same technology platform
- Standard fundamental analysis model for commercial companies
- Support for both manual and automated financial statement and collateral data input
- Ability to create a historical archive of all the factors influencing the rating and more
- Fundamental analysis framework that includes a sophisticated ratio analysis algorithm, assessing ratio trend and volatility
- Configurable reports that can be printed, with save and email options
- Explanation reports that allow drilldown into the reasoning behind the analysis
Ease of Use
- Tuning tool enables risk managers to create and modify risk-rating models for different business lines
- Alerts communicate credit policy with custom messages and help text within each rating model
- Provides context-sensitive help on all rating model input factors and output assessments
- Benchmark tool creates custom peer groups for comparison
- Administrative tool configures user rights and run-time properties
- Unique graphical meters that instantly highlight areas of strength or weakness for each credit
- Allows assessments to be generated even when borrower information is incomplete
- Data synchronization supports remote work activities across multiple locations
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