Research case study

What was the context?

A Multilateral Development Bank (MDB) was concerned about building systemic risks. Its credit research and risk management team is very senior, with 15 years on average of professional experience. The MDB has direct exposure to infrastructure and corporates, and extends guarantees to third party banks for their small and medium enterprises’ portfolios. It contacted SwissThink to organize a seminar to map these risks.

What did SwissThink do?

Jean-Michel Six, former EMEA Chief Economist of S&P Global, was for many years on the ECB Shadow Council. Blaise Ganguin, President of SwissThink, designed and coordinated S&P credit rating stress tests during the European sovereign debt crisis as Chief Credit Officer for EMEA. Leveraging this experience, Jean-Michel and Blaise designed a customized workshop to lead the team to identify key system risks, interdependencies across sectors and map them to the Bank’s portfolio in an interactive fashion.

What is the benefit to the client?

The main benefit for the Bank is to identify early human resistance to cliff changes. Economic trends are generally gradual, but severe shocks happen. Jean-Michel and Blaise have a long experience leading teams to consider the impact of transversal risks, such as covenant light structures, credit access and country risks. By mapping these risks, the Bank can prepare its teams to stress scenarios.