Swedish mortgage company SBAB relies on SAS® for Basel II compliance
Banks the world over are faced with the challenges of complying with the new Basel Capital Accord, otherwise known as Basel II. Established by the Basel Committee on Banking Supervision, Basel II is aimed at improving the safety and soundness of the European financial system.
However, it has also been criticized by some for placing too much responsibility directly on the financial institutions. In spite of these challenges, Swedish mortgage company SBAB has faced this responsibility head-on by investing in SAS software.
Advanced risk measurement
SBAB plans to achieve its goal of developing and refining its internal rating models faster, more efficiently and more accurately by using SAS software. "The advanced analytical capabilities and the ease of creating internal statistical rating models for credit risk using SAS will facilitate SBAB's adjustment to Basel II, and at the same time simplify our credit issuing process," says Bengt-Olof Nilsson Lalér, credit director at SBAB. "We realized early on that if we focused on a powerful tool to create an internal ratings system according to Basel II, we would gain several positive effects. Therefore, we talked with several consultants and experts who had an understanding of the systems that other Swedish and foreign banks have implemented. All the consultants we talked with specified SAS' solution as one of the most used and most well known. So, it was natural for us to choose it.
"It is very interesting to find a solution which not only produces quality assurance analyses, but which also documents the rating model so that it can be approved by the Swedish Financial Supervisory Authority (Finansinspektionen)," continues Nilsson Lalér. "And with the SAS software, we have achieved this. In the long term, these statistically secured risk calculations will also give us major opportunities to rationalize the credit issuing process. Used correctly, this can cut our costs and make us even more efficient."
Complying with the Basel II regulations may actually strengthen SBAB's position in the mortgage loan market. Due to having developed advanced analytical capabilities and good statistics, SBAB can easily and accurately establish its risk level, thereby complying with the risk-adjusted capital coverage requirement.
The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.
Copyright © SAS Institute Inc. All Rights Reserved.
Comply with Basel II regulations to ensure the safety of Europe's financial system.
SAS for credit scoring allows accurate risk measurement.
“The advanced analytical capabilities and the ease of creating internal statistical rating models for credit risk using SAS will facilitate SBAB's adjustment to Basel II, and at the same time simplify our credit issuing process.”
Bengt-Olof Nilsson Lalér