SAS has released new solutions for credit risk management that it says provide an end-to-end environment for estimating retail and corporate credit risk exposure.

The credit risk management solutions are a part of SAS Risk Management for Banking, a new suite of solutions for enterprise-wide risk management.

SAS says the solutions are in compliance with Basel II regulations currently in development by the Basel Committee on Banking Supervision, under the wings of the Bank for International Settlements. SAS adds that it is the only vendor to provide Basel II-compliant retail, corporate and portfolio credit risk analysis and reporting within one software suite.

The Basel II accord places far more stringent requirements on the way in which banks manage their exposure to bad debt, by making them calculate and put aside a Capital Adequacy Reserve … an amount of money needed to cover potential losses to customers defaulting on credit repayments. Banks that can accurately estimate their credit risk exposure are expected to be able to reduce their Capital Adequacy Reserve by up to three percent. This reduction in reserve gives them more working capital to grow and increase profitability.

SAS Risk Management for Banking provides a credit risk-modeling environment to support an internal-ratings-based approach, the company says. Instead of adopting one of the currently popular credit risk management approaches, SAS says it is the only vendor that offers a flexible environment for credit risk management where different approaches (CreditMetrics, Creditplus, regulatory requirements as laid down in the New Capital Accord, etc.) can be implemented and simultaneously evaluated.