Moody's KMV, the leading provider of quantitative credit risk analysis tools to lenders, investors, and corporations, plans to offer a regulatory capital calculator developed by TLC as an add-on to its widely used Portfolio Manager application, which is used to assess portfolio credit risk and return. The enhancement will allow Portfolio Manager clients to calculate both economic and regulatory capital on a consistent basis, said Moody's KMV.

The alliance will leverage the expertise of TLC, an independent software house and business domain consultancy serving the banking sector. The firm has developed software called barracuda that calculates regulatory capital across an institution using the Standardised, IRB Foundation, and IRB Advanced approaches set forth by the Basel II guidelines. Under the Moody's KMV implementation, users will be able to view and report results by various categories such as country, currency, product, division/branch, counterparty and rating.

"This alliance offers a number of benefits for Moody's KMV, as we continue to develop a complete range of Basel II and corporate credit risk solutions for our client base," said Andrew Porter, Head of Business Development at Moody's KMV. "By working with TLC, we will be able to bring this capability to market in a timely fashion and add TLC's considerable Basel II expertise to our own domain acumen."

The partners said they may also offer barracuda for integration with third-party and in-house systems and are in discussions with major integration and technology partners to support this initiative.

"TLC is tremendously excited to be working with Moody's KMV on this project," said Adam Starr, Chief Operating Officer at TLC. "We are happy to help Moody's KMV extend their solution set to include best-of-breed regulatory capital reporting capabilities. At the same time we have been looking for a branded partner in the credit space that would provide significant credibility and distribution capabilities. Moody's KMV was the natural choice."

The partnership with TLC was pursued as part of the Moody's KMV global alliance program, through which the firm seeks to augment its development, integration and distribution capabilities.