Risk management is a very important concept as financial decisions revolve around the corporate cost of holding risk. This issue is particularly important to banks since risk constitutes their core business processes.
In order to assess and manage risks, banks must have effective ways to determine the appropriate amount of capital that is necessary to absorb unexpected losses arising from their market, credit and operational risk exposures. In addition to this, profits that arise from various business activities of the banks need to be evaluated relative to the capital necessary to cover the associated risks.
With Element, you can identify, analyze and understand :
- Exposure, economic capital and expected loss at a holding company level as well as across subsidiaries and lines of business
- Return distributions (including RAROC) and exposure across several dimensions, viz. regions, states, industries, business/rating categories
- Granular exposure information, viz. where are the hot spots of the banks’ portfolio
- Concentration of counterparties with in the banks’ portfolio over time