Baseline Capital Limited reaches critical mass for its Basel II data pool.

Baseline Capital Limited is pleased to announce that eight mortgage lenders have confirmed they will join its Basell II data pool.

This means that Baseline’s data pool now has sufficient volume of mortgage data from which to build robust models with the high degree of predictiveness required for an Advanced-IRB approach to Basel II credit risk.

Statistical research carried out by Dr Satchell of the Faculty of Economics and Politics at the University of Cambridge, shows that an average mortgage lender or data pool would need at least 200,000 mortgage accounts to generate sufficient default data to credibly achieve Advanced-IRB status*.

The number of uncommitted lenders is now diminishing making it difficult for other providers to achieve critical mass.

Tim Fletcher, Baseline’s Sales and Marketing Director, said: "Lenders committing to us can now be sure they will receive statistically robust and credible analysis. We appear now to be the only credible provider of pooled data solutions for Basel II credit risk analysis for UK residential mortgage lenders. It’s a shrinking pot. Any lender signing up to a Basel II pool provider will have to ensure that their provider can deliver on its promises and that it has in place viable business models supported by sufficient risk data.

"Initial data output from our solution has started, enabling client lenders to commence building a credible track record of use prior to FSA application from mid-year onwards."

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