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| Risk Assessment |
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Standard & Poor's Risk
Assessment Services are a
comprehensive suite of
solutions for assessing
credit risk that complies
with Basel requirements,
including a thorough
evaluation based on credit
and market risk
implications, credit
assessment, credit scoring,
and quantitative modeling.
The results provide
institutions with predictive
analyses and benchmarks that
align with other
institutions to better
manage credit risk.
Risk assessment is an
important, yet difficult,
step in the risk management
process. Once risks have
been identified and
assessed, the steps to
properly deal with these
risks are more formulaic.
Part of the difficulty of
risk management is that
measurement of both of the
quantities in which risk
assessment is concerned-
potential loss and
probability of occurrence-
can be very difficult to
measure. The chance of error
in the measurement of these
two concepts is large. A
risk with a large potential
loss and a low probability
of occurring is often
treated differently from one
with a low potential loss
and a high likelihood of
occurring.
In theory, both are of
nearly equal priority in
dealing with first, but in
practice it can be very
difficult to manage when
faced with the scarcity of
resources, especially time,
in which to conduct the risk
management process. |
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