• Basel II
• Data Analysis
• Provision Models
• Credit Risk Models
• Forecasting. Stress Testing

4-Most consultants have had a strong exposure to Impairment modelling and measuring Credit Losses. This provides significant strength since frequently this type of modelling is independent of ‘traditional’ Retail Credit Risk and Scorecard modelling methodologies.

This is an area of increasing importance as the IFRS 9 Accounting Standards and Principles are to be phased in by 2015. The new guidelines will require a new approach to Impairment and Loss provisioning – as it is a joint objective shared by UK/EU and US stakeholders. This new approach is more than likely to incorporate some calculations from Credit Risk models combined with forward-looking macro-economic data.

4-Most consultants have considerable experience in this area which includes:

• Lifetime Economic Loss (LEL) modelling
• Incurred But Not Recognised (IBNR) modelling
• Incorporated forward-looking macro-economic data into Credit Risk models
• Published statistical study on implications of the above at leading industry event.

Recent projects undertaken by 4-Most consultants on behalf of clients have used these techniques, for example, the re-development of a model on a loss incurring loan portfolio by splitting the portfolio into ‘good’ and ‘bad’ portfolios and applying different loss treatments by incorporating forward-looking macro-economic variables.