Credit Risk: Ask This;

Credit Risk: Ask This;

TLDR: Ask This;

1. How does your organization have confidence that a hedge of its portfolio credit risk will work?

2. Does your organization have access to sufficient portfolio management techniques, including credit risk mitigation tools?

3. Does your organization have a documented credit risk management policy revision procedure?

4. Does your organization have a credit risk management procedure and do you know what it is?

5. Does your organization have a written credit risk review policy that is reviewed and approved by the board of directors at least annually?

6. Does your organization have a documented credit risk management guideline or policy?

7. Does your organization have a set credit policy that contributes to credit risk management?

8. Has your organization evaluated its exposures to direct and indirect credit risk arising from current market credit and liquidity conditions?

9. Does your organizations risk assessment aggregate exposures organization wide and across lines of business?

10. Does your organization rely on third parties to perform any portion of its risk management function?

11. Does your organization require confidentiality agreements to be signed by all key employees, clients, and contractors to minimize the risk of proprietary secrets being compromised?

12. Has your organization lending staff underestimated the amount of credit risk in the loan portfolio?

13. Has your organization a corporate and risk culture adequate for its business and risk appetite?

14. Which data quality dimensions does your bank use in quality assessment of credit risk data?

15. How does the counterparty exposure and the risk of default impact the value of the security?

16. What have been the benefits of the new model based approach to risk measurement and management?

17. Do you currently have a credit risk technology change strategy in place and what is the objective?

18. Is your organization being adequately meticulous and selective when making crucial credit risk decisions?

19. What are the credit risk and counterparty risk implications for each financial organization where you might deposit excess cash?

20. Is your bank integrating sustainability risks into credit risk management procedures for clients using trade finance/ supply chain finance instruments?

21. Is the credit risk management strategy explicitly take into account information quality?

22. Do you have the means to assess whether residual exposures are within the risk appetite of your organization?

23. What details should be provided by your organization in its credit risk disclosures?

24. Why has a quantitative portfolio approach to credit risk management become so important?

25. Is the risk appetite stated and does it accurately respond to your organizations risk capacity?

26. Are there information cleansing scripts in use in the credit risk management information systems?

27. Will another wave of regulation help or hinder organizations risk management efforts?

28. Is staff aware of an additional consideration as to why it would be inappropriate to provide an upward credit risk adjustment to the cost of equity for your organization?

29. How credit granting processes affect your organizations credit risk management practice?

30. How many employees does your organization have supporting investment management businesses in total?

31. Has the board and senior management defined your organizations credit risk appetite?

32. When using a credit risk mitigation technique, does it utilize eligible financial asset collateral?

33. Is there an alternative or more objective standard for determining when the board must reassess the credit risk of a security that would provide adequate investor protections?

34. Who has the authority to establish credit risk management in policy or procedure your bank?

35. What does a securitization investor require to analyze and price the credit risk of a transaction?

36. How would you characterize the potential credit risk of your organizations overall loan portfolio?

37. Do you have an accurate and comprehensive picture of credit and counterparty risk across your organization?

38. Are adequate risk reporting policies and compliance functions established, approved by the management body?

39. Have you identified the capabilities your future credit risk tech will need to address?

40. Does senior management establish rules for credit risk management in accordance with credit risk management policies and with the approval of the board of directors etc?

41. Do you believe that the application of risk management techniques reduces costs and expected losses average?

42. Is liquidity risk management involved in new product considerations in the financial institution?

43. Is the risk protection consisting of capital and liquidity sufficient to buffer financial market shocks?

44. Are there comprehensive policies to govern credit risk taking and management activities consistent with the institutions risk profile and nature of business?

45. What extent banks performance is affected by appropriate credit risk management methods, policies and strategies?

46. What is the general control process for various credit risk mitigation techniques within the risk management system?

47. Does bank management ascertain the quality of the portfolio and assign risk ratings?

48. Do you agree with the definition of operational risk as all risks other than market and credit risk?

Organized by Key Themes: RISK, MANAGEMENT, CREDIT, DEVELOP, ANALYSIS, DATA, PRODUCT, CHANGE, PROCESS, MARKETING:

RISK:

Are any index or structured exposures decomposed/unbundled into single name exposures?

Check that your design works with credit strategy teams and business to define business requirements and oversees the development and execution of testing plans to ensure excellence in delivery for product launches implementation of technology projects that impact credit strategies and credit risk infrastructure. 

What kinds of system support risks are in existence after the system has been installed, and how financially stable is the support entity?

Oversee implementation of Business Intelligence and ETL solutions across multiple projects, providing direction to the Credit Risk Management team during project delivery and ensuring implementations support technology and business roadmaps. 

Have you assessed risk of working remotely on your cybersecurity and IT environment?

Be confident that your company is accountable for the development and mentoring of a high performing team that conducts and develops quantitative and analytic models, assessments and/or applications in support of risk management efforts that assess the market, credit and/or operational risks of new and existing financial products. 

Which team should be responsible for developing climate scenario analysis/stress testing capabilities?

Make sure the Analytics team is responsible for developing risk management products through data and analytical solutions built on top of your organizations big data resources. 

How should a bank regard credit enhancements when your organization attempts to balance liquidity risk and credit risk?

Verify that your company partners and collaborates with internal teams to deliver risk analysis and future-state control advisory services by integrating operational, credit, market, and business risk review/consulting processes with credit, market, and technology processes and by providing input into the development and implementation of automated solutions to enhance productivity. 

What is the date of initial recognition for the purposes of assessing significant increases in credit risk for a revolving credit facility?

Safeguard that your team is involved in analyzing and assessing financial organization capital, liquidity, credit, market and operational risk management and risk governance. 

Do the owners have resources and intention to support your organization financially if needed?

Support management of the credit risk appetite framework, including calibration of portfolio appetite limits linked to business strategy and entity capital/earnings and for compliance with various complex regulatory requirements. 

What drives the seemingly strong response of credit spreads to labor market fluctuations?

Identify and recommend opportunities for process improvement and risk control development to drive your organization credit culture, desire, and business performance. 

Are asset and liability totals on reports tied to or consistent with general ledger totals?

Make sure your process supports Credit Risk Management team in preparing reports and documentation for regulatory reviews and audit activities. 

What are areas in which the board could provide better support to the executive director?

Perform your organization needs in depth market and credit risk analysis to support organizations Risk Management and regulatory demands. 

MANAGEMENT:

Is the policy for writing down unsaleable inventory documented, applied consistently, and flexible enough to handle sudden changes in customer purchase patterns?

Confirm that your group is assisting with all stages of credit and risk initiatives and projects across the organization, utilizing credit policy knowledge and portfolio management skills in identification and implementation of process improvements and control programs. 

What data need to be collected that stress scenarios can be applied to liquidity exposures?

Make sure the Credit team is responsible for the management of all aspects of the credit risk mitigation effort including researching and analyzing new and existing counterparties to determine appropriate levels of exposure, negotiating and structuring of contracts and credit support arrangements, and monitoring and reporting of credit exposures and events. 

Which bank staff review or have access to the applications with completed monitoring information?

Lead the preparation of written Credit Approval and Credit Risk Review Packages for both new and existing (internal) customers in partnership with Business Development and Portfolio Management (new (internal) customers) and with Portfolio Management only (existing (internal) customers). 

What are the applications of distributed ledger technology in reducing credit risk and collateral?

Interface so that your design is implementing an effective portfolio risk management process that invest in identifying, managing, monitoring, and reducing risks in the portfolio assets. 

Is the increased availability of large volumes of financial data changing how creditworthiness and credit risks are assessed in your industry?

Make headway so that your organization expands its knowledge in consumer risk management credit cycle processes and asset product operations. 

Is market risk management involved in new product considerations in the financial institution?

Be sure your organization is involved in credit risk management in a policy, credit analysis or credit approval capacity in wholesale credit or counterparty credit risk management. 

Does your organization have written policies regarding personal account trading by employees?

Ensure your Risk Management teams work to protect the safety and soundness of your systems and are responsible for identifying, managing, measuring and mitigating a spectrum of key risk types including credit, market, liquidity, systemic, operational and technology in all existing and new products, activities, processes and systems. 

How many employees does your organization have supporting investment management businesses in total?

Be a part of the (internal) client Services team build custom applications for Risk Management and Risk Reporting supporting the Credit Risk and Front Office teams. 

What should also sets forth some or grouped based upon which area by increasing internal functions including for unusual circumstances noted that management practices at?

Oversee that your group coaches staff and credit administration organization on risk management practices. 

What are the additional risks from planning and implementing new products or projects?

Work with Portfolio Management and Credit Risk Management teams to evaluate current practices, systems and functional requirements of the collections functions and assess resource needs based on current and future state of operations and plan volumes. 

CREDIT:

What are the significant changes to the business, competitive or control environments?

Assess ongoing market risk and new market opportunities, including analyzing key market trends and developments in the commercial business credit environment and advising management regarding needed commercial portfolio strategy changes and concentration risk levels. 

Are credit risk policies and guidelines dealing with the process of single name monitoring?

Implement an effective portfolio risk management process that invest in identifying, managing, monitoring, and reducing risks in the portfolio assets, including development of project specific Credit Monitoring Plans. 

Is management informed of new systems design and available hardware for the wire transfer system?

Manage a team of leaders responsible for building and maintaining governance processes across all of Consumer Credit Risk and Policy Management including lending authority, exception reviews and other governance related activities. 

Are staffing/recruitment practices in line with the business needs of your organization?

Perform credit analyses on hedge fund counterparties identifying major strengths and weaknesses via a review of investment strategy and leverage, liquidity sources and uses, performance history, portfolio exposures and risk management practices. 

Are counterparty credit conditions analyzed and lines reviewed with adequate frequency?

Coordinate activities with other departments in your organization responsible for risk management including Credit Administration and Credit Risk Review (2LOD). 

Do securities sub ledgers accurately reflect market values obtained from outside sources?

Work with designated Credit Manager(s) to establish portfolio credit risk management performance guardrails and evaluate performance, utilize sensitivity analysis, stress testing, market trend, and other analytical methodologies to anticipate any credit trends or deterioration and obtain insights into portfolio performance and market opportunities. 

Is a safekeeping register maintained to show details of all items for each customer?

Oversee that your operation identifies, recommends and effects process changes as related to credit risk management activities, regulatory statutes, credit policy and general credit underwriting guidelines. 

How do you begin the process of having collateral created?

Develop collaborative working relationships with Business Unit stakeholders to monitor portfolio, policy and other developments, including the units progress in remediating credit risk management defects. 

Is debt management staff able to perform an independent market valuation for all debt securities?

Make sure the Unit also conducts data analysis in the context of a larger Credit Risk Management strategic initiatives. 

Is management reporting prepared on a sufficiently independent basis from line management?

Provide key analytical data and assessment of risk factors for monthly Business Credit Portfolio Highlights report. 

DEVELOP:

Has management taken corrective actions to follow up on previously identified deficiencies?

Develop a go-forward strategy to evolve the TPRM program and continue to develop and oversee a third-party risk governance structure that ensures that all business owners and third parties that expose the organization to compliance, credit, information security, offshore, operational, and strategic risk follow appropriate controls. 

Does your organization consider alternative plans in response to changing conditions?

Oversee that your workforce develops credit risk assessment programs in line with your organizations strategic plan. 

How effectively are board approved risk tolerance levels communicated in your organization?

Develop risk models involving market, credit and operational risk and ensure controls are operating effectively. 

When the front office has influence, how does management validate summary data and findings?

Develop, maintain, and validate a credit risk score used by the (internal) client as an early warning tool. 

What data sources should be considered when developing a methodology to assess country risk?

Ensure strong leadership and involvement coaching, growing, and developing team members. 

Does your organization have contingency plans in place, at least for the most critical areas of the business?

Certify your strategy develops and implements financial policies and procedures and ensures compliance. 

Are there any individually segregated client accounts within the main client account?

Develop and lead the (internal) client Service Team ensuring long term (internal) client satisfaction. 

How do you respond to the growing risks of financial conglomerates?

Develop and maintain a robust product roadmap for all in scope business segments. 

Does the financial asset meet the definition of low credit risk at the reporting date?

Develop experience assessing enterprise business continuity and resiliency programs. 

How do you best integrate margin periods of risk when modelling counterparty credit risk?

Develop consumer focused and insight driven briefs and lead integrated organization briefing sessions. 

ANALYSIS:

Have management and the board communicated performance goals to the mortgage banking unit?

Conduct ad hoc analysis of credit and/or financial performance to assess existing or emerging risks and communicate findings to business partners and risk stakeholders. 

Should you include any additional risk premiums to reflect the overall greater uncertainty in forecasting inputs, credit risk and liquidity risk?

Support risk management projects that include industry benchmarking, credit vintage analysis, credit concentration analysis, and additional insights to financial risks. 

Does your organization have sufficient liquidity to meet its obligations for the foreseeable future?

Ensure you have credit knowledge and involvement with high volume risk analysis and underwriting. 

How quickly are trade data reflected in management information systems, including systems for measuring, monitoring and controlling counterparty credit risks and market risks?

Make sure your company drivers of credit performance, risk models, underwriting policies, monitoring and analysis. 

Is liquidity risk management involved in new product considerations in the financial institution?

Make headway so that your company is involved in system analysis and writing business and functional specifications. 

Are you using data driven analytics to drive better decisions informed by customer, credit risk, and marketing?

Be confident that your group works on T 10 (deep dive root cause analysis) with support of In Business ORM and drive corrective actions. 

Have you participated in infrastructure investment transactions in emerging economies?

Perform model and market related analysis using available tools and participate in the ongoing development and improvement of tools. 

Are providers engaging in practices that may make product assessment and comparison more difficult?

Be sure your process reviews audits, interim statements, projections, and other pertinent financial information to provide analysis of financial trends. 

Do you agree that granularity is a relevant factor determining the credit risk of the underlying?

Warrant that your staff is underwriting and financial statement analysis skills serving a variety of industries and business types. 

Do you have an accurate and comprehensive picture of credit and counterparty risk across your organization?

Verify that your company is identifying trends and conducting root cause analysis to isolate key drivers. 

DATA:

Will you use internal or external resources to manage and monitor your third parties?

Proactively collaborate with Credit Risk Management, Marketing Analytics, Marketing, Data Management and Governance. 

Does your organization use automated exception reporting systems to flag potential compliance problems?

Lead the identification and use of new Data for Credit strategy development to yield improved risk identification or automate decisions. 

What could be giving some providers the ability to maintain the high prices or sustain poor product/service offering?

Perform analysis and development for feeds of market, Liquidity, operations and credit risk data. 

Are you using data driven analytics to drive better decisions informed by customer, credit risk, and marketing?

Locate the new and/or best sources for Credit risk data to drive more effective and efficient analytics. 

Does management provide adequate resources for an appropriate level of internal audit work?

Confirm that your operation serves as the business lead to information technology staff on implementation of your organizational data warehouse and other business intelligence work. 

Is there enough capital available on the institutions balance sheet to support the risk being taken?

Make sure your process provides technical assistance in the development, selection, documentation and implementation of metrics and performance data to support departmental budget proposals and other department initiatives. 

How can risk visibility be enhanced by technology and automation and by timely and effective reporting?

Develop Big Data capabilities, tools and techniques to enhance Credit and Fraud Risk, and Information Management functions. 

Are key messages highlighted in the most efficient manner to convey critical information?

Certify your organization is expanding analytic and data capability for small business lending (internal) customers. 

Has your bank observed any changes in the composition of the client base to which you provide derivatives clearing services?

Collaborate with GPA colleagues in assisting with data analytics and investment analysis across Systematic and Factor Investing Strategies, including data automation and reporting, by generating and interpreting performance attributions and portfolio characteristics. 

Does your organization use automated exception reporting systems to flag potential compliance problems?

Ensure your organization helps organizations to manage credit risk, prevent fraud, provide data security and automate decision making. 

PRODUCT:

Do the reference data meet the established quality criteria in all material respects?

Partner with product, technology, and credit risk teams to create your organization and products that meet the needs of consumers in a unique way. 

How do you work with revenue model analysis?

Work with partners in Legal, Credit Risk and Compliance on all matters related to Payments products to ensure compliance with all regulations, policies, and procedures. 

Do you create a safe zone atmosphere for the consideration of risk management issues?

Manage all products from design to implementation and ongoing performance according to business need. 

Does your organization have financial standards and goals for things as financial leverage, profitability, cash flow, and growth?

Establish Go to Market plans and business readiness activities for product development. 

How do you balance and deliver an optimal customer experience within your credit risk requirements?

Be confident that your staff works across teams to deliver a cohesive (internal) customer experience across products and channels. 

Has the management team grown in experience and skill to match the evolving size and complexity of the business?

Review and improve processes for decision making and product development in an evolving organization. 

Does your organization protect the value of its intellectual property through continued research and investment in new product development or by purchase from outside developers?

Make sure your operation conducts market research on current and new product concepts. 

Does your organization have a set credit policy that contributes to credit risk management?

Be sure your organization contributes to internal presentations on product and strategy. 

Are customer complaints resolved by someone other than the person who executed the contract?

Ensure the team is efficient and productive in order to execute to goals. 

How do you approach the implementation of a centralized credit risk reporting system if there are already various existing systems in place?

Build products using a (internal) customer driven development approach. 

CHANGE:

Have there been any personnel, operational or ownership changes at your organization?

Utilize analytical skills, operational skills and knowledge, and risk assessment skills in evaluation, recommendation, and implementation of changes in credit oversight procedures. 

Are you operationally ready for utilisation of liquidity facilities and liquidity buffers?

Liaison so that your company implements policy changes and process improvements and provides updates on progress. 

What kind of interest rate trends have been experienced over the past few years and what impact have interest rate changes had on the profitability of your organization?

Interface so that your workforce performs standard analysis to identify changes in exposure and associated impact on modeling results. 

Is the scope approved by the board annually or whenever significant interim changes are made to adequately assess the quality of the current portfolio?

Review and provide Compliance approval of exception requests, new projects and business changes. 

Does your organization have the technological capabilities and capacities to deliver the service and are systems compatible with the clients systems?

Secure that your organization implements organization wide initiatives by communicating the why in order to lead change and deliver results. 

Do you intend to perfect a security interest in the securities offered as collateral?

Be sure your team changes behavior in response to feedback and learns from involvement. 

How often does your organization change its guidelines or policies to manage credit risks?

Ensure your organization is viewed as a change agent and builds a shared vision for change. 

What is your organizations flexibility to improve its gross margin, either through cost control or pricing changes?

Certify your process prepares explanations of changes in Dispute Resolution inventory results and trends. 

What is the ability of your organization and its employees to keep pace with changes within the industry on a timely basis?

Make headway so that your workforce implements necessary changes in tax related procedures. 

Does the effect of credit risk dominate value changes that result from the economic relationship?

Build strong working relationships, operate in large cross functional teams, and influence colleagues to implement effective strategies and drive change. 

PROCESS:

Is there an established criteria for assessing credit risk faced by market intermediaries?

Assess program and process enhancements for strategy and implementation plans to address productivity, employee experience and business requirements. 

How does your organization have confidence that a hedge of its portfolio credit risk will work?

Make headway so that your team provides process analysis improvements pre IT solution work across enterprise. 

What program or opportunity that seemed unlikely or years away could be accelerated?

Invest in mentoring and training to accelerate model development in areas of techniques, process and business knowledge. 

What impact do economic issues have on the sustainability of small, medium and micro entrepreneurs?

Develop high performing teams by understanding and facilitating team dynamics, recognizing, and developing great talent, recommending process improvements, and ensuring you have an engaged team. 

How should capital requirements reflect the partition between qualifying and non qualifying?

Make headway so that your strategy oversees team processes and updates policies to reflect improvements. 

Did you comply with the monitoring and credit management requirements of the authorization?

Make sure your process ensures all transactions and processing comply with regulatory and organization guidelines, policies and procedures. 

Is there evidence of new entrants, business models, technologies being introduced, or other emerging trends that may materially improve how the market works?

Certify your workforce develops quantitative and qualitative methods, systems and visualizations to measure performance of key services and work processes to improve departmental performance. 

Which team is responsible for developing climate scenario analysis/stress testing capabilities?

Manage the cross-functional strategic planning and business planning process, leading conversations with key stakeholders to develop concepts for strategic initiatives, and developing those into detailed program/project plans (including roadmaps, business requirement documentation, funding planning, resource planning). 

What options could be supported to enhance supply chain performance and manage credit risks more effectively?

Invest in developing processes and procedures to support business activities. 

What organizational changes will be required in order to implement the revenue model?

Coach and mentor individuals and teams in the practical application of process improvement tools to enable project execution and drive culture change. 

MARKETING:

Are reported sales a true reflection of market demand and what is potential to be converted to cash?

Ensure strong management skills with involvement with both creative and marketing team members. 

Can the credit risk be sold off because investors are already used to that credit risk?

Guarantee your process is involved in use and management of CRM and loyalty/rewards marketing systems. 

How will the revenue model profitably meet the demand of different customer segments?

Secure that your strategy works closely with project management team, marketing operations team, creative. 

What do you feel is the level of clarity and understanding of your strategy to people in your organization?

Collate relevant data from across your organization to build and understand holistic marketing insights. 

What drives the seemingly strong response of credit spreads to labor market fluctuations?

Certify your team drives social media marketing strategy and usage of online reputation tools. 

What portion of the database where your primary data comes from suffers from data quality problems?

Ensure strong management and leadership capability across all departments of Marketing. 

How do you measure and quantify risk?

Develop experience using data to develop and measure marketing programs. 

Does the minimum investment required comply with investment policy counterparty/credit risk limits?

Develop marketing strategies for new products or services that comply with current organization standards. 

Are you using data driven analytics to drive better decisions informed by customer, credit risk, and marketing?

Develop experience developing and implementing marketing plans that drive (internal) customer demand. 

How should internal credit grading systems identify significant increases in credit risk?

Safeguard that your team directs the efforts of both your Marketing and Partnership teams.