Understanding and Preparing for Basel II and IA

Changes to the capital standards of both large and small banks under Basel II and IA have altered the competitive landscape of the mortgage industry.

All industry participants—and not just banks—need to understand how this capital regime affects their own competitive positions so that they can design and implement appropriate strategies going forward.

To help institutions successfully navigate the changing regulatory environment, we are offering range of consulting services that can be specifically tailored to the needs and priorities of your institution. For example, using the Credit Facilitator Model, we can help you:

• Assess the impact of the new capital standards on the value of alternative forms of credit enhancements to different types of potential investors
• Develop pricing and credit enhancement strategies that will maximize the value of mortgage pools
• Design products and business strategies that will enhance your competitive position under the new regulatory regime

For institutions directly affected by Basel II or IA, we can also:

• Assist in the design and implementation of stress tests as required under Basel II
• Benchmark your existing stress test models to industry standards, including the OFHEO model
• Assist in the development of long-term capital planning strategies

For more information about our Credit Risk Analysis Services, please contact us.

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