Question

Discuss the advantages and disadvantages of working with the Moody’s Analytics Credit Monitor model.

Answer 1

Advantages of working with Moody's Analytics credit monitor model:-

A.   Get a comprehensive dataset on public firm, default risk drivers, Financial information
B.   Compare each firm to its peers, industry or groups set up alerts and download your reports.
C.   Easily manage your portfolio, upload your exposure and calculate expected loss and potential future loss
D.   Identify names at risk of default or downgrade utilizing the early warning toolkit
E.   Asset manager can also use comprehensive bond features including our proprietary fair value spread and alpha factors restrict to perform relative value analysis and systematic capture alpha in fixed income and equity market.
F.   Advance analytical model and objective credit ratings can greatly enhance the quality of credit decision by facilitating an accurate risk assessment of the borrower.

Disadvantages of working with Moody's Analytics credit monitor model:-

•   Determining the credit worthiness of borrower is a critical component of lending success. In today’s highly competitive lending environment accuracy is essential and time is of the essence when counterparty risk. Yet the process of gathering and analysing borrower information in order to assign a credit score or grade is still too often a manual, error prone process that can take days or even weeks.