Rating agencies raise the bar

Confidence in energy traders has never been lower, and the metrics the rating agencies apply to their business are changing. James Ockenden assesses the damage

On June 14, Janine McArdle was still confident that energy trading was simply too important for her company to ignore. The managing director of Aquila Europe was insisting Aquila was not going to follow El Paso and Dynegy and cut back its energy trading operations. “We’re in growth mode,” she told EPRM in an interview at Aquila’s London offices. “You can’t put the genie back in the bottle.”

But the genie was, in fact, being put back in the bottle even as she was speaking. In the

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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