Fitch Risk has launched a new Internal Ratings Validation Service designed to help financial services firms bring their internal credit ratings practices into line with emerging regulatory standards.
With regulatory recognition for the use of internal credit ratings growing, the new service provides firms with the information they need to evaluate and develop internal ratings processes.
"With many institutions looking to qualify for the Internal Ratings-Based Approach (IRB) of The New Basel Capital Accord, banks are seeking independent benchmarks for their internal ratings that do not force firms to adopt a single credit risk methodology," says Christopher Lewis, managing director, Fitch Risk Advisory. "This new service provides firms with an industry-proven standard for evaluating the performance of their ratings processes that is, in all aspects, independent and methodology-neutral."
Users of the package will be provided with both a qualitative assessment of their overall ratings processes, data, and methodologies and a quantitative benchmark of their internal ratings results, he says.
The Internal Ratings Validation Service applies Fitch Risk's proprietary CRS and supporting ratings models to provide industry-proven issuer ratings for a representative sample of each client's portfolio.
Benchmarking services are provided for a variety of obligor and transaction types, including corporates, financial institutions, utilities, small-to-medium sized enterprises (SMEs), real estate facilities, and project finance structures. At the completion of the analysis, Fitch Risk provides each firm with a validation study of the firm's ratings framework, along with recommended improvements.