GOVERNMENTS & REGULATORS
Managing Complex Financial Instruments
Risk Integrated assists government’s treasury groups to manage complex financial instruments such as infrastructure guarantees, syndicated loans and project finance while also providing training and general risk consulting.
While the banking sector has been the main source of liabilities in the latest financial crisis, infrastructure projects can add significantly and unexpectedly to fiscal stresses, especially in times of financial meltdown. Private public partnerships have caused governments to suffer from partially managed contingent liabilities for many years due to overly optimistic projections unattainable in the concurrent economic downturn. As part of their rapid infrastructure development strategies, governments have sought private-sector capital and private-sector managers and have also added explicit and implicit government commitments to make the large projects more financially attractive.
To estimate their significant financial exposures such as described above, Risk Integrated has aided governments by using the Monte Carlo simulation approach to estimate and manage the range of possible future payments.
Risk Integrated has also worked with the financial regulators in both the U.S. and Europe. We have provided consulting and training courses for examiners in the risk management and the implementation of Basel II.
The SFS portfolio management and risk management system is used today by a national regulator for tens of thousands of commercial real estate loans to provide a picture of the systemic risks posed by the commercial real estate market. This uses the processing power of the SFS linked to the detailed, flexible analytics.