Counterparty Risk Benefit Assessor

Our Counterparty Risk Benefit Assessor tool is used to assess the benefits and associated costs of any counterparty risk initiative. We have a pre-configured tool for this purpose, but this may also be built out to meet a client’s particular requirements. The diagram below shows the primary components of our Counterparty Risk Benefit Assessor:

For each of the areas covered we have developed a range of metrics to assess the benefits and costs arising from the proposed programme of work:

Area	Metrics
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P&L	Expected revenue benefits to be gained from any given counterparty risk project e.g. from increased business arising from reduced or more efficient limit utilisation
Risk exposure	Expected change in counterparty credit risk exposures as a result of improvements to be made to the counterparty risk process
Capital	Expected change in client’s economic and/or regulatory capital through more sophisticated counterparty risk modelling
Efficiency and control	Efficiency and control benefits to be gained from automation and or rationalisation of the end to end counterparty risk management process. e.g. in rationalisation of counterparty risk limit structures
Reputation	This is a more judgemental area in which we assess the likely impact on the client’s reputation from the perspective of: Customers Regulators Peers Rating agencies/providers of credit
Project costs	We have standard project cost estimations for counterparty risk projects based upon previous work. These can be used as a starting point and be built out for each client specific initiative
Ongoing technology costs	We have standard ongoing technology cost estimations for counterparty risk infrastructure based upon previous work. These can be used as a starting point and be built out for each client specific initiative
Headcount costs	We have a headcount model for the estimation of the ongoing incremental business headcount which can be expected to arise from any process change