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Providing software solutions since 1976
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Credit Risk Assessment advocates new lending systemSAS, Wiley book unpacks the current financial crisis and a comprehensive framework to avoid a recurrenceCARY, NC (Mar. 30, 2009) – A pair of authors from SAS, the leader in business analytics software and services, has defined a comprehensive framework for lending that explains how the current economic crisis began and how to avoid another. The new system benefits borrowers, lenders and investors by providing greater transparency and more relevant loan-affordability factors. Its single, consistent view of credit risk encompasses borrowers, lenders, security issuers, investors and regulators. Credit Risk Assessment: The New Lending System for Borrowers, Lenders and Investors, the latest in the Wiley and SAS Business Series, reunites 30-year banking veteran Clark Abrahams and Senior SAS Solution Architect Mingyuan Zhang. The book illuminates fundamental and widespread flaws in the US financial system, including inadequate risk assessment, over-reliance on models, and lack of transparency and accountability. “Today’s loan classification process is backwards,” said Abrahams, Chief Financial Architect at SAS. “There’s too much emphasis on credit scores and too little on traditional credit fundamentals: character, capacity, capital, collateral and conditions. By incorporating judgment and common sense into a systematic process, we have the best that science and business experience can offer. This new lending system puts controls in place that will keep greed in check.” Credit Risk Assessment describes a new lending system that specifically addresses the flaws, thus helping all parties to the process. Borrowers, who are assigned a unique number that is more responsive to changes in their total financial picture, can decipher, verify and improve their loan affordability relative to an agreed-upon set of fundamental credit qualification factors. Lenders benefit from a system that effectively reduces their underwriting gap, providing better loan decision accuracy, loan product matching, and fair pricing and terms. Investors gain greater transparency, more information and improved accuracy. Lastly, regulators are better equipped to more effectively ensure lender safety and soundness. The book discusses how a comprehensive framework and systematic approach can prove effective for crisis prevention and intervention alongside managing day to day lending. To help manage fallout, for example, the framework can help qualify borrowers for assistance who are facing foreclosure. To prevent further damage and repeats, the new system provides more effective early warning for lending patterns and portfolio structural changes that lead to greater risk of loss so that appropriate risk mitigation measures can be taken. Asset allocation and capital requirements can also be better determined by applying this same framework to a bank’s loans or credit derivative securities. For more information or to order a copy, visit the SAS Learning Center/Bookstore. Abrahams and Zhang also wrote Fair Lending Compliance: Intelligence and Implications for Credit Risk Management.
SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions delivered within an integrated framework, SAS helps customers at more than 45,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world
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