As part of the UAE-based bankâs strategy of moving towards the Basel II IRB (Internal Ratings Based) Approach, it is using obligor risk rating models across a number of asset classes within FGBâs portfolio.
The external validation requirements being conducted by S&P Risk Solutions extend across FGBâs risk rating framework. They apply to the bankâs rating system design, rating system operations, risk quantification, corporate governance, and the use of internal ratings. The external validation process also includes both qualitative and quantitative assessment of FGBâs risk rating models.
Arif Shaikh, Chief Risk Officer for First Gulf Bank, says: "S&P Risk Solutions was selected for its extensive experience in evaluating banksâ credit risk rating models and the ability to work with the bank across a variety of models used by the bank. By providing validation recommendations and enhancements, S&P Risk Solutions will help us prepare and meet the IRB requirements of the Basel accord."
First Gulf Bank will also use the Risk Solutions Analytical Services in developing a âRisk Appetiteâ overview for the bank.
Having been adopted by several global financial institutions, the recommendations and enhancements offered by Risk Solutionsâ validation framework have a proven track record of winning regulatory approval.