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Credit Risk Analytics

Financial institutions face increased pressure and monitoring from regulators to comply with tighter regulatory mandates and more stringent rules in all forms of risk—credit risk or liquidity, market, operational, or enterprise risk. 

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Overview

Financial institutions face increased pressure and monitoring from regulators to comply with tighter regulatory mandates and more stringent rules in all forms of risk—credit risk or liquidity, market, operational, or enterprise risk. Such increased regulatory compliance mandates place significant pressures on internal management and companies' boards of directors. These mandates must be dealt with in a marketplace getting more competitive all the time.

Many financial institutions increasingly seek assistance from external parties due to internal limitations in required expertise, presence of resources, analytical capabilities, and availability of data. During such project assignments with external experts, institutions also have the chance to learn best practices and internalize know-how. Many institutions, both financial and non-financial, also view the application of risk management analytics and methodologies as “best practice” in their daily operations. Similar analytics and methodologies also have been adopted in financial reporting of non-financial firms and are more commonly used in litigation expert opinion analysis.

What We Do

Berkeley Research Group’s Credit Risk Analytics practice provides a range of service offerings grouped under three main streams:

Credit Modeling and Validation, Governance, Regulatory, Compliance and Capital Advisory

Credit risk model services range from data cleansing and building dual-credit risk parameters models—namely probability of default (PD) and loss given default (LGD) models—to credit portfolio management, decision making, capital estimation, stress testing, and regulatory preparedness.

Sovereign and Country Credit Risk Modeling and Advisory

Credit risk assessments for clients with direct international lending exposures, mostly to emerging or developing countries not typically covered by rating agencies. Berkeley Research Group’s services include client-requested custom analytics, such as development of sovereign frameworks, scorecards, models, methodologies, and valuation.

Credit Valuation, Rating Advisory and Credit Assessments, Structuring/Restructuring, and Litigation Expert Opinion

Our experts provide initial creditworthiness assessment and preparatory advice to clients as they seek to obtain ratings from credit rating agencies. Additional aspects of rating advisory work include the optimization of financing mix and capital structure to reduce cost of debt, rating defense and improvement, and detailed analysis of corporate transactions on ratings and cost of debt. As a natural extension of rating advisory and credit assessment services, we advise clients with structuring alternatives and analyze the impact of corporate transactions on credit risk parameters for structuring and expert opinion purposes. We also provide valuation of corporate and municipal bonds, structured deals and notes, tranches of RMBS, CMBS deals and CDOs backed by auto loans, student loans, healthcare receivables, home equity lines of credit for purposes of fair-market value estimation, portfolio acquisition, and quantification of damages.

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