Algorithmics Incorporated announced it has been selected as the risk data services and analytics provider for the Pan-European Credit Data Consortium (PECDC).
The first cross-border industry data pooling initiative for credit risk, the PECDC currently has the participation of many European top 15 and several global top 10 banks. The consortium was established in response to thescarcity of timely and accurate historical loss and recovery data, required to satisfy the new Basel Accord on Regulatory Capital known as Basel II. The PECDC’s stated objective is to collect European-wide, or in some cases global, corporate loss and recovery data to assist member banks in completing their preparations for Basel II.
Algorithmics will provide a suite of advice, tools and services relating to data pool design, source data collection, data-point validation, quality control and data normalisation. The end deliverable to PECDC member banks will be time-series data pools relating to all Basel corporate exposure categories: Large Corporates, Small Medium Enterprises, Banks and Specialised Lending, including; Shipping, Aircraft and Project Finance. In this initial phase, loss and recovery observation data will be pooled.
“The development of the PECDC over the last ten months as an industry initiative driven ‘by banks for banks’ has, we believe, provided the best avenue for European banks to achieve Basel II compliance and to improve their internal credit modelling,” commented Dr. Scott D. Aguais, a director and head of Credit Risk Methodology at Barclays Capital and member of the PECDC Management Committee. He continued, “Algorithmics was chosen as our partner because of their extensive knowledge in the area of credit data pooling and analysis. With both the PECDC and our relationship with Algorithmics firmly established, we can now get the hard work really started!”
“With this partnership agreement we have achieved the best possible combination of credit portfolio management expertise, provided by some of the industry’s leading banks, and the in-depth data management experience and technical excellence of Algorithmics,” says PECDC Management Committee Chairman, Jeroen Batema of NIB Capital Bank.