CREDIT MONITORING HAS AS MANY VARIABLES AS STARS LAID
OUT IN A DARK NIGHT SKY
Introduction
Banks
are in the business of taking risk and about 80 to 85 percent risk
within a bank is "Credit Risk". The success of a bank depends on
how well it manages risks. There needs to be a mechanism put in
place in all banks that allows them better risk management and to
keep the management of the bank, at all levels, informed of the
situation. Furthermore, under the BIS/BASEL II (Basel Committee
for Banking Supervision's New Capital Accord BIS II), capital adequacy
of a bank is directly proportional function of the risk that a bank
writes in its book of accounts. This is clearly reflected by the
two (out of three) main Pillars of Basel II or BIS II:
MINIMUM
CAPITAL REQUIREMENT SUPERVISORY
REVIEW PROCESS
INGREDIENTS
OF CREDIT RISK MANAGEMENT
In the
light of BIS/BASEL II and its requirement of "Supervisory Review
Process", we at RED2GREEN (R2G) believe that credit risk management
is incomplete without the credit risk administration and monitoring
process being brought within the overall credit risk management
process. Consequently, CREAM has been designed in the light of two
international standards:
The BIS/BASEL II
The BASEL Publication
75 for Credit Risk Management
MOST
COMPREHENSIVE CREDIT RISK MANAGEMENT TOOL
CREAM provides automation
of "Credit Risk Environment" i.e. credit risk measurement and management
(BIS/Basel II Risk Sensitive Capital Adequacy based) together with
the credit risk administration and monitoring (BASEL Publication
75 based). Thus CREAM becomes a unique product that provides complete
end to end credit risk management solution. It fully supports the
pillars of BIS/BASEL II and the Risk Environment and assesses the
credit risks in trading and corporate banking books. It is the most
comprehensive risk management tool available in the marketplace
