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For Immediate Release
Moody’s KMV Rolls Out Cost Efficient Software Tool Capable Of Accelerating Basel II Compliance Process
Broad Availability of Risk Advisor 5 Brings First Off-The-Shelf Solution to Meeting Central Requirement of Basel II
SAN FRANCISCO, June 30, 2004 - Moody's KMV, the world’s leading provider of quantitative credit-risk measurement and management tools to lenders, investors and corporations, today announced it has rolled out another key element in its industry-leading Basel II compliance support. Risk Advisor offers banks, organizations and corporations an alternative to building on their own the very complex internal ratings-based systems necessary for compliance. With the availability of Risk Advisor Version 5, whose arrival has been anticipated since it was announced by Moody’s KMV 60 days ago, the broadest range of banks, organizations and corporations can now access a shortcut to achieving foundation IRB.
The data collection and analysis product provides a platform with which banks can satisfy a central requirement of Basel -- internally generated ratings of every borrower and of every individual credit facility. It ensures that all relevant risk factors, both financial and non-financial, are assessed in a consistent and transparent manner. The product includes a standard fundamental analysis model that provides predictive and accurate rank ordering of commercial borrowers. Also, clients can easily configure the framework to represent their own borrower rating models and provide additional perspective on specialized areas of lending. Risk Advisor Version 5 also assesses the riskiness of each facility in terms of its Loss Given Default (LGD) and Expected Loss (EL) in accordance with IRB regulations. A one-click archiving system captures the rating data for reporting, audit and model validation purposes.
“By implementing Risk Advisor 5, banks can realize a significant cost and time savings over the alternative approach of building ratings tools on their own,” said Mary Jan Hedman, Director at Moody’s KMV. “It represents a complete, robust framework that requires relatively minor calibration and configuration to produce ratings from the data submitted to it.”
Moody’s KMV developed Risk Advisor 5 with the input of a number of its customers who have used earlier versions to help them establish internal ratings.
“Risk Advisor’s well-proven credit risk assessment methodologies and state-of-the-art support tools can simplify the creation and implementation of new risk-rating systems,” Ms. Hedman said.
With the product now broadly available, Moody’s KMV said it plans to move quickly to reach out to existing customers as well as first time users who will face the challenge of meeting Basel II requirements in the near future.
“Increasing numbers of banks are beginning to look for IRB solutions that will drive them toward Basel II compliance,” said Ms. Hedman. “We believe this offering, which is based on Moody’s KMV’s years of experience in risk management technology, is becoming available at just the right time.”
About Moody’s KMV
Moody’s KMV, a wholly owned subsidiary of Moody's Corporation, is the world’s leading provider of quantitative credit risk analysis tools to lenders, investors, and corporations. Moody’s KMV's tools provide current default probabilities, recovery estimates, valuations and correlations, and are widely used to assess portfolio risk/return. Serving over 2,000 clients in 80 countries, including most of the world's 100 largest financial institutions, Moody’s KMV maintains the largest and cleanest database of corporate defaults in the world. In addition to its San Francisco headquarters, Moody’s KMV has offices around the world to serve its global customer base.
About Moody's Corporation
Moody's Corporation (NYSE: MCO) is the parent company of Moody's Investors Service, a leading provider of credit ratings, research and analysis covering debt instruments and securities in the global capital markets, and Moody's KMV, the leading provider of market-based quantitative services for banks and investors in credit-sensitive assets serving the world's largest financial institutions. The corporation, which reported revenue of $1.2 billion in 2003, employs approximately 2,300 people worldwide and maintains offices in 18 countries. Further information is available at www.moodys.com.
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