Financial Sector - Risk Management

Recent events have demonstrated the necessity of sound risk management across all business sectors.  A great deal can be learnt from the risk management techniques employed in mission critical engineering disciplines where effective risk management is a pre-requisite to operations.
 
Many businesses in the area of banking, financial asset management and insurance have failed as a result of ineffective risk management, while others are grappling with the new challenges they face from this market dislocation.

Logic Engineering

CRA adapted the operational risk assessment techniques it applies to the engineering discipline to form an analysis tool called Logic Engineering (link to section) to fit the Finance sector.  A lack of effective operational risk management allowed disparate groups within institutions to invest in assets they did not fully understand and in a size ill suited to the size of the organisation.  A holistic risk management approach would have helped highlight these issues much earlier in the cycle and given management the opportunity to question such strategy.

Logic Engineering offers a holistic approach to operational risk management, from process mapping through to risk identification, mitigation and measurement.  It is a dynamic model that captures the inter-dependencies between systems and processes (human and technological).
 

Advisory

The market dislocation of 2008 provides both challenges and opportunities for market participants. As credit availability continues to shrink, the continuity of debt financing is as uncertain today as at any time in the last 30 years. At the same time, many financial institutions and other organisations are holding portfolios of financial instruments whose valuation, volatility and risk profile are difficult to measure and predict.
 
CRA can act as an independent financial risk consulting firm assisting your organisation to navigate your way through this period.  The void created by the recent financial turmoil has led to the need for impartial advice from experts with accounting, banking and insurance market experience. Whether you are looking to enter a new market or looking for assistance with exiting a market or a position, CRA has the expertise to guide you successfully through this process.
 
Our consultants bring over 50 years of combined experience of structured products, leveraged loans and derivatives markets.  Our expertise comes from the structuring, restructuring and sales side of the market as well as the investing and credit analysis perspective.  In the area of asset management, we have many years of experience mortgage-backed securities, credit derivatives, CLOs, CDOs and synthetic securitisations.

Below are just a few examples of areas where CRA can assist you and deliver real results:

• Initial credit assessment of structured instruments to assist you in the buy or sell decision making process
• Valuation and accounting – valuations against cash-flow forecasts and against market
• Risk management and portfolio optimisation –risk diversification and effective hedging strategies
• Regulatory relief transactions and government sponsored funding and capital relief initiatives
• Loan restructuring and amendment / waiver requests - impartial advice on loan documentation, renewal, restructuring and workout, and
• Training and education - our consultants have worked with clients and bank support personnel in these areas and can make complex products easier to understand.

Our consultants have a deep understanding of the financial markets.  Their experience includes:

• Senior roles in international organisations providing over 45 years of combined experience in the financial markets from accounting, tax, structuring, restructuring and workouts to sales / brokerage and portfolio management perspectives.  Roles include European Chief Underwriting Officer and Global Head of CDOs

• Asset classes include all structured finance and derivative instruments (including ABS, CDOs, CLOs), secured and syndicated loan arrangements and project finance in various jurisdictions around the world (and included multi jurisdiction structured transactions);

• Experience across a broad sector of industries, including consumer finance, commercial and residential real estate, leisure and gaming, transport (rail and shipping), power and utility and manufacturing covering both large and small/medium sized companies;

• Our consultants are qualified accountants, having qualified with one of the ‘big four’ accounting firms – Coopers and Lybrand (now PwC) which provided them with comprehensive auditing, advisory and risk assessment experience.

Banking and credit management experience is gained from leading international organisations including JP Morgan, UBS, CIBC and XL Capital Assurance.