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Ben O'Brien, Managing Director

The author

Ben O'Brien

Managing Director

It’s increasingly difficult for lenders to keep pace with capital developments, and regulators have great ambitions to raise the bar on risk management. There are two approaches to calculating capital requirements, the standardised approach and Internal Ratings Based (IRB) approach. Being awarded IRB status confirms a bank has sophisticated risk management capability when it comes to calculating its capital requirements.

Yet compliance with the IRB approach requires considerable internal resources and is often extremely complex, that’s why firms often turn to specialist consulting firms with vast experience in this area.

We are delighted to announce that specialist lender and banking group, The Paragon Group of Companies PLC, has partnered with Jaywing to design an analytical framework with the potential to enhance the profitability of the business through greater capital efficiency and improved risk management controls. Jaywing has worked with Paragon across a variety of risk modelling projects in the past, most recently providing oversight on the development of IFRS 9 models. So they asked if we could help.

Through a flexible consultation approach, the team has designed an approach to augment the skills and experience that Paragon needs to complement internal resources and create a successful IRB waiver application programme. This means Paragon will be able to develop and increase their credit risk modelling capability along with other regulatory and operational risk objectives.

Talking about the programme, Julian Knight, IRB Director, said; “The achievement of IRB status, with its enhanced approach to risk management and consequential commercial benefits is one of the Group’s key medium-term strategic goals. We have selected Jaywing to support the IRB programme because of their extensive knowledge and experience in this area and their commitment to work with Paragon to embed this capability within the risk management function across the organisation”

We are delighted to continue to work with Paragon. We understand the importance for Paragon of being able to achieve an integrated framework, as lenders today are looking for a cost effective way of remaining compliant and adopting more sophisticated approaches to risk management.

If you’d like to find out more about our IRB expertise and how we have helped other lenders to achieve advanced IRB status, please get in touch today.