CPM functions go back to basics

The crisis has made it more difficult for credit portfolio management desks to manage loan portfolios by transferring risk. Instead, there’s a growing focus on old-fashioned virtues. Mark Pengelly reports

In the 1985 film Back to the Future, a teenager is catapulted 30 years into the past where, stripped of the pleasures and luxuries of the late twentieth century – skateboards, Huey Lewis & The News and freely available plutonium – he has to rely on dated technology to ensure his future prosperity. It’s a storyline with which credit portfolio managers can probably empathise: the crisis has curtailed the use of risk transfer tools such as loan credit default swaps (LCDSs) and collateralised loan