Solution Overview

The global banking community has long debated the best path forward for managing credit risk following the 2008 financial crisis with two types of strategies—strict risk limits, capital charges or a combination of both—have already been variously implemented as or are in finalization. Capping the risk to a single counterparty as a percentage of total capital on hand is one way of doing this, particularly in order to limit excessive exposure between systemically important banks and thus avoid any potential domino effect should one of them fall into distress. This idea, combined in the US with an additional Total Loss Absorbing Capacity (TLAC) assessment, features prominently as a tenet of capital adequacy.

On a technology level, marrying aggregate exposures data with firm-level capital data—two sets of information traditionally sitting in separate parts of the bank—is one major challenge, while keeping each of these accurate and up to date is yet another. Valuation adjustments (capital charges) have proven contentious as a matter of regulatory mandate; the industry continues to argue over risk limit percentages, too. But banks now have both natural and compliance-driven motivations to be as precise as possible regarding single counterparty exposure. AxiomSL’s historical strength in risk data aggregation can help them get there.

Resource Center


EBA publishes Opinion on transitional arrangements and credit risk…

The European Banking Authority (EBA) published today an Opinion on transitional arrangements and credit risk adjustments to mitigate the effect of the accounting standard IFRS 9 on prudential ratios…


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FINMA Publishes Circular On Credit Risks And Disclosure

The Swiss Financial Market Supervisory Authority FINMA has published the revised circular on credit risks and disclosure for banks. The regulations on credit risk capital requirements for banks…


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EBA consults on Guidelines on credit risk management practices and accounting…

The European Banking Authority (EBA) launched today a consultation paper on draft Guidelines on credit institutions’ credit risk management practices and accounting for expected…


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Leading Spanish Bank Selects AxiomSL’s Strategic Analytics and Reporting…

AxiomSL’s enterprise-wide approach enhances analytics and controls throughout the organization while providing management with dashboards and internal and external reports…


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