S&P nails exclusive Default Filter deal with IQ Financial

The exclusive nature of the deal is restricted to rating agencies, with IQ Financial still able to offer the product to financial services companies. But it will block other rating agencies like Moody’s and Fitch Ibca from using Default Filter, which was developed at Bankers Trust in New York. The venture could form the foundation of a global deal, S&P said.

“Record levels of defaults, a continuing global economic slowdown and the proposed changes to the Basel Accord are causing risk managers to place even greater focus on credit risk management,” said Roy Taub, executive managing director at S&P RiskSolutions. “IQ Financial Systems’ Default Filter credit risk management software, coupled with Standard & Poor’s extensive expertise in the area of credit risk analysis, will provide a unique and powerful combination to assist managers in implementing more sophisticated methodologies in the identification and measurement of credit risk.”

Default Filter is a comprehensive credit risk management system, which is fully compliant with Basel II credit rating requirements, IQ Financial claims. It was introduced commercially in 1999 and is currently used by 14 financial institutions.

S&P’s Risk Solutions group was formed in January 2001 to broaden the firm’s participation in credit markets beyond ratings.