The preliminary development work to prepare the shared IT platform for CRD started already in 2002 and has so far cost more than half a billion Danish kroner. The money has been spent on establishing a solid foundation enabling the Group to assess the creditworthiness of each individual customer, price the individual loan and manage the Bank’s credit risk and solvency ratio on the basis of the same models and methods.
The shared Group platform has allowed the Group to build a data warehouse containing data on all the Group’s customers and facilities, thus providing a shared overview and history for estimating parameters and validating models. Moreover, the shared platform and the data warehouse have been instrumental in Danske Bank’s possibilities of choosing the advanced method for calculating credit risk.
The development work underpinning CRD began long before CRD entered the scene and it reaches far. For instance, the Group developed classification models for a number of years that supported the requirements for internal models under Basel II advanced. A host of models targeting CRD have also been built. One type of model is the new credit risk model for calculating economic capital, which is the Bank’s own assessment of the capital requirements included in pillar II. In addition, there are systems development to support the application requirement and calculation and reporting of solvency to the authorities in the countries in which the Group is represented by companies under independent supervision.
Last updated on October 5, 2007