Rule-based Risk Assessment

How to Apply Internal Rating Models for Assessment of Credit Risk

A borrower's default risk and loss severity are key factors of successful credit risk management and fundamental prerequisites for adequate credit portfolio management.  The risk rating models that encompass key risk parameters are often complex and must be continually adapted to regulatory requirements and market dynamics.

In recent years, the Basel II Accord in particular has given rise to the need for continuous and costly development and improvement of risk rating models. Therefore, the possibility of applying internal rating models for credit risk assessment is of central importance.

Transparent Implementation of Credit Risk Rating Models

With its Credit Risk Rating Platform, Bosch Software Innovations offers a comprehensive solution for the transparent and flexible development and implementation of credit risk rating models. Bosch Software Innovations’ Credit Risk Rating Platform comprises the following core components:

Model Authoring Platform: The central platform for the creation, testing and on-going maintenance of risk rating models. The graphical modeling environment facilitates development and improvement of rating models to such a degree that it can be done by risk experts.

Rating Manager: A Web-based application for credit analysts for management and execution of ratings in a production environment, it supports the entire rating process from data collection through risk calculation to final approval.

Stress Testing: This encompasses impact analysis and portfolio optimization through simulations and stress tests.

Rating Database: The Rating Database is a Basel II-compliant relational database that stores all relevant input and output data for credit risk rating.