Effective use of credit has always been the cornerstone of good business, and today's regulatory environments make this even more critical. Misys Summit provides for a sophisticated set of tools to manage credit risk, combining detailed analyses with real-time limit-checking, and the ability to view consolidated exposures with a straightforward mechanism for defining individual limits according to product type, counterparty and term structure.

Misys Summit's credit risk modules cover the various aspects of credit exposure, including:

• Credit risk
• Settlement risk

In addition, we provide support for analysing exposure to multiple entities. This includes:

• Counterparty risk
• Country risk (separate limits for location and ownership)
• Issuer risk
• Industry sector risk
• Rating risk

Real-Time Limit Checking

As well as having the ability to carry out sophisticated credit reporting , Misys Summit acknowledges the importance of having up-to-date credit information constantly available.

The real-time credit limit functionality within Misys Summit uses powerful back-end engines to push information out to users on the current exposures present in the portfolio. The front-end display of this information is consistent across all users, but can be displayed in a way to suit that user.

Dealer credit view

Dealers and sales people can set up their viewer to show them only the limits for the counterparties they are interested in at that time.

• Keying in a counterparty name displays that counterparty's current risk position compared to the lines open to them
• Entering the basic details of a trade with a counterparty shows current exposures, and how the potential deal will affect them, showing clearly whether the trade would breach warning levels or the actual limit.

The information displayed is both flexible and dynamic:

• All limits affected by a given trade will be displayed. This includes:
  • Credit limits
  • Parent limits
  • Trade type limits
  • Term limits
  • Settlement limits
  • Country limits
  • Overall limits
• The display provided to the user is flexible in what it displays and how it interacts:
  • Columns and their order can be chosen by the user:
  • Limit amount
  • Usage
  • Remaining limit
  • Trade usage
  • Reservations
• Colour coding makes it easy to see warnings or limit breaches
• Double-clicking on a limit line drills down into the component trades

Risk manager view

The risk manager can obviously use the same viewer as the trader, but in addition has a simpler, high-level credit risk viewer.

All of the features available to the trader above are available to the risk manager, but the viewer will typically be run in one of three modes:

• All risks – this shows all exposure lines, complete with utilisations. The display can be sorted by an column, allowing alphabetical sorting, or a display in order of remaining utilisation, for example
• Warnings – this shows all limits where the utilisation warning threshold has been passed
• Breaches – this only shows those limits which have been breached

With all of the displays above, colour coding on the display draws attention to warnings or breaches.