Historically, credit risk portfolios have been managed within separate lines of business. This approach, however, creates a ‘blind spot’ for risks developing across a firm.
Recognising this blind spot has resulted in new regulations and accounting rules being introduced, with the greatest impact being upon capital and liquidity. With increasing costs and pressures on margins, these drivers have acted as a catalyst for the integration of credit portfolio strategies into relevant risk-related business lines.
This white paper explores how the new regulatory and accounting rules are driving convergence with enterprise risk. Further explore the paper to examine the implications that this will have on credit risk modelling.