These projects involved issues related to credit risk management in banks and to appropriately structuring banks’ balance sheets.
The general principles involved, however, can be applied to any type of business or industry. All businesses face risks, which need to be identified, quantified and controlled appropriately.
Capital adequacy
- Basel II-related project for an Australian major trading bank.
- Reviewed current bank prudential supervision policies and procedures (Tonga).
- Wrote prudential supervision policy and procedures manual for off-site surveillance and on-site examination of banks (Tonga).
Credit grading issues and systems
- Estimated credit grade distribution for credit risk planning purposes (Indonesia).
- Calculated Grade Migration experience (Indonesia).
- Developed quantitative ‘Expected Default Frequencies’ for qualitative credit grades.
- Calculated average credit risk lending grades for a bank.
- Design and implemented a credit risk grading system (Timor-Leste).
Large credit exposures
- Developed Large Credit Exposure Policy to limit one-name exposures.
- Developed industry limits model to constrain exposure to individual industries.
- Developed large exposures policy for lending (Australia & Timor-Leste).
- Determined industry prudential limits for credit risk exposure.
Market issues
- Reviewed and revised business plan of an NGO’s Micro-Credit Unit (Indonesia).
- Compared Financial Institutions Act 2004 with Financial Institutions Act 1991/1997; assessed regulatory changes required to implement new Act (Tonga).
- Drafted procedures to implement Anti-Money-Laundering legislation. (Tonga).
Loan loss provisioning related issues
- Calculated loss rates for micro-finance unit (Indonesia).
- Estimated provisioning required for expected loan losses (Indonesia).
- Developed follow-up lists for Cluster Coordinators to deal with potential bad debts (Indonesia).
