Stress Testing Case Studies

A large US bank
This lender uses Moody’s CreditCycle for strategic applications/planning and for regulatory stress-testing requirements. With a diverse portfolio, they were looking for a robust, transparent and manageable platform for forecasting and stress testing. The group chose Moody’s CreditCycle for its ability to combine economic and internal policy simultaneously to measure impacts quickly, in more details and with added transparency. In addition, our efficiency in forecasting future vintages was a key differentiating factor. The ability to deliver solutions quickly also contributed to our selection.

A leading Insurance firm
This Western insurance company selected a Moody’s Analytics custom solution by our Economic Analysis and Portfolio Management divisions to stress test their £2 billion credit portfolio. Our team of consultants enabled this client to build and run scenarios to assess portfolio risk. Our economic and portfolio management expertise and global coverage were key decision factors.

A large auto lender
This auto lender chose Moody’s CreditCycle because it is a comprehensive way of capturing all portfolio drivers, being external such as the economy or internal such as lending standards or dealer behavior. The lender was fully focused on getting accurate forecasts in order to optimize its dual mandate of facilitating auto sales while managing profitability for the group. The combination of regional economic expertise and a comprehensive modeling platform offered by Moody’s CreditCycle won over Management. Now, the client are using Moody’s CreditCycle to run its lending business, forecast loan performance, perform stress testing, and to set reserves for loss allowance.

A global credit card issuer
This credit card lender is using Moody’s CreditCycle to help identify how its credit card portfolio correlates with the underlying economic and credit environment—what the drivers of performance are, how they interact, how they differ by segment, geography and time, etc. Additionally, the lender is using Moody’s CreditCycle to forecast delinquency rates under various economic scenarios for what-if analysis and stress testing. They selected Moody’s Analytics because of the transparency of our methodology, modeling expertise, and access to our in-house team of economists and quants.

A global bank
This bank chose Moody’s Analytics Stress Testing for identifying sources of concentration in certain stress scenarios in order to determine credit portfolio management actions. The solution was specifically developed for their global portfolio, with customized models and indicators to suit their overall strategy. The client selected Moody’s Analytics for our strong expertise in risk management and large and quality data to solve this complex problem. They also consider the discussions with our research and consultants one of the most important factors in choosing us.