Trade Finance

Arc Analytics - Trade Finance

About

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The flexibility of the Portfolio Risk Calculator means that it can be used to assess the default risk of a portfolio of Trade Finance loans.

sector advantages

The PRC is built with a flexible mathematical framework; a Monte Carlo Simulation under a Gaussian copula. This allows users to assess the default risk of different portfolios with varying levels of granularity, including trade finance loans. 

The Trade Finance product can be used to support the analysis conducted by Institutional Investors, Family Offices, Hedge Funds and Sovereign Wealth Funds.

It enables the user to continually assess the up-to-date default risk of portfolios of trade finance loans.

The product can be used to provide support to Students and Academic Institutions.

The PRC demonstrates how the default distribution of a portfolio of trade finance loans is calculated by way of a Monte Carlo simulation, using a Gaussian copula model.

Financial Institutions can use the Portfolio Risk Calculator to assess and compare the default risk of different outstanding portfolios of trade finance loans. 

Trade Finance Products

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PORTFOLIO RISK CALCULATOR

The Portfolio Risk Calculator (PRC) calculates the default distribution of a portfolio of loans. Its flexible Mathematical framework, a Monte Carlo simulation using a Gaussian copula model, allows for the analysis of a wide variety of loan portfolios across various asset classes and varying drees of granularity. This includes portfolios of CLOs/SMEs, Project Finance and Trade Finance. The tool calculates the default and recovery rates for different risk score scenarios / confidence levels which, if the user wishes, can form part of the asset side assumptions of the Cash Flow Simulator.