Surya's Risk Analysis and Credit Evaluation (RACE) solution offers an advanced statistical approach to credit risk management. With RACE, banks can accurately measure corporate credit risk by computing Probability of Default (PD) and mapping it to a range of rates to arrive at credit ratings. RACE's PD model is a non-parametric model based on the study of 4,800 companies with 10, 5, 3, 2 and 1 years of data, and uses statistical pattern recognition methods to arrive at a purely quantitative PD.
RACE also offers a workflow for credit risk management, which allows for effective collaboration between proposal generators, credit risk officers, and management. By using a non-parametric model and integrating qualitative factors to modify the calculated PD, RACE offers a comprehensive solution to credit risk management. Additionally, RACE can be used as a secondary or verification model for PD calculation and is available as a subscription service. Overall, RACE is a powerful tool for banks looking to effectively manage credit risk and make informed decisions about credit ratings.
Based on advanced pattern recognition techniques, financial data for financials varying from 10 years to 1 year has been collected from 4800 companies, 280 in default.
Discriminant analysis yields those financial ratios that matter to a default and further classification yields 76 possible paths to default and PD calculation algorithm therefore is biased towards false positives.
