Moody's KMV, the world's leading provider of quantitative credit risk measurement and management products and services, today announced the launch of its RiskFrontierâ¢ solution which represents a major step forward in the tools available for all financial institutions looking to understand and communicate the credit risk in their portfolios.
RiskFrontier provides financial institutions of all sizes an accessible, enterprise-wide tool for measuring and understanding credit portfolio risk. RiskFrontier offers unparalleled modeling capability, enabling users to measure credit risk across multiple asset classes, from loans and bonds with options, to CDS and CDO tranches. Specifically, RiskFrontier will allow users to assess capital adequacy and concentration risks more precisely than any other commercially available software and analytics solution. This clarity is critical to strategic decision making as financial institutions allocate economic capital to customers and business units against a backdrop globally of increased competition and regulatory imperatives such as the Pillar 2 requirements of the Basel 2 accord.
âIn building RiskFrontier we set out to achieve two key goals for our clients: to provide an intuitive, easy-to-use solution to a complex problem and to make that solution available across an enterprise to ensure consistent measurement and reporting. Moodyâs KMV has always led the way with state-of-the-art data and analytics and now weâve remade our portfolio solution to be much more accessible with an intuitive user interface and more users will be able to take advantage of our credit insight. This new solution provides financial institutions with a way to measure portfolio-level credit risk using advanced analytics (with several major enhancements of previous methodologies), compare that risk to the economic returns of other portfolios and, most importantly, identify specific actions designed to improve portfolio performance,â said Andrew Huddart, President of Moodyâs KMV.
"We recognize financial institutions have a significant need to measure the concentrations of risk assumed in their businesses. Our unique technology, combined with market and default data collected for nearly 20 years (and our default data goes back through several economic cycles to the 1970âs), will provide users of RiskFrontier with cutting-edge and, comprehensive research, visibility into their portfolio risks and insight into opportunities for improvement. Moreover, RiskFrontier will allow institutions to access quickly the information and analysis necessary to adapt to the changing regulatory environment," continued Huddart.
Thomas Villadsen of Jyske Bank, one of RiskFrontierâs beta testers, added, âWe have always appreciated the quality of Moodyâs KMVâs work in helping us better manage our credit risk but this new solution is a great leap forward in almost all dimensions.â