The CPM challenge
The credit crisis and ensuing writedowns have provided a number of lessons - and challenges - for credit portfolio management groups. How did banks fare during the crisis and what improvements can be made? By Uwe Stegemann and Gosta Jamin
Since the mid-1990s, banks have invested significant resources in building up active credit portfolio management (CPM) functions. In good times, few questioned the logic behind this. After all, credit risk exposure lies at the heart of a bank's business, accounting for up to 90% of assets, 70-80% of capital and 60% of revenues. CPM desks enabled banks to hedge against concentration risk, protect
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