Risk Integrated Introduces Stress Testing Service for Basel II Compliance
Risk Integrated has announced the availability of its Profitability Analysis Program for commercial real estate. The service will allow banks or lenders to evaluate the risk in their portfolios and the effectiveness of risk decisions made using their present assessment methodologies. Through the service, Risk Integrated’s Specialized Finance System (SFS) will also help financial institutions assess whether they are prepared to meet Advanced Basel II capital adequacy requirements, due to be introduced by US regulators in January 2009. By using advanced Basel II compliant credit risk analytics, the Profitability Analysis Program is designed to allow lenders to evaluate a block of 10 commercial real estate investment deals, both as a portfolio and as individual deals. The company says that it will offer this solution as a stand-alone service, without the need for implementation of the system. The results are generated as a report, providing analysis of all commercial property deals and including suggestions on how to improve their risk-adjusted profitability. The reports quantify the source of risk in the portfolio and the extent to which it is caused by lease structures, interest rates, tenant creditworthiness or exit risk.