The Risk Management Association, the US-based professional association, has partnered with Automated Financial Systems (AFS) to provide independent, external benchmarking for commercial lending risk exposure.
The RMA says the benchmark data, marketed as The Risk Analysis Service, will enable bankers to assess the commercial risk profile of their institution in the context of industry risk for comparable segments of the portfolio.
The Association says the service will help banks comply with the forthcoming Basel Accord, when capital requirements are tied to credit risk management performance.
Maurice Hartigan II, president and CEO of RMA, says: "External yardsticks for self-evaluation have become not merely a matter of prudence, but of regulatory compliance in this new environment."
The service delivers information by portfolio segment, including asset size, loan product, collateral type, vintage, and industry. The data will be based on AFS' processing of participating banks' actual commercial lending databases.
John Shain, president of AFS, says: "By focusing deeply at the individual loan level, we will be able to create a new RMA benchmark metric that financial institutions can depend on for standardised risk measurement and assessment of the dynamics of change."