About this paper
Historically credit risk portfolios have been managed within separate lines of business, creating silos of activity separate from market and operational risk. But regulatory requirements, accounting rules changes and an evolving economic environment are forcing financial and risk stakeholders to collaborate across the firm. Banks are now integrating credit portfolio strategies with other lines of business that affect market, liquidity and operational risk.
With this sea change, credit risk models need to support risk management and capital allocation decisions at a firmwide level – and they need powerful, automated tools to address this challenge. Developing and executing credit risk models as they become increasingly integrated with firmwide risk, balance sheet targets and limits will require new software and technology, from more sophisticated models to enhanced data management and high performance computing.