The Risk Analysis divisions provide expertise on quantitative modeling of credit risk, market risk, and enterprise-wide risk to bank examiners and policy makers, conduct research in those areas, and deliver expert analysis of policy issues.
The Divisions in Risk Analysis
The Compliance Risk Analysis Division (CRAD) contributes to the development and execution of the OCC's supervisory and regulatory mission in three major ways: 1) direct exam support for bank supervision, 2) economic and policy analysis, and 3) pursuit of an active research agenda. Staff use statistical analysis and develop econometric models to support bank examinations that monitor compliance with federal laws and regulations. Specific areas of focus include those related to credit access and anti-money laundering. Staff's quantitative expertise also serves the basis for inter-agency and intra-agency discussions that support the development of banking and regulatory policies. In addition, staff actively conduct original and publishable research in areas of mortgage, finance, labor, and statistics.
The Credit Risk Analysis Division's (Credit RAD) primary areas of responsibility include: direct exam support for bank supervision, scholarly and policy-orientated research, and economic and policy analysis to support the development of sound banking policies. In direct bank supervision support, staff serve as technical advisors to examiners on the design, development, and assessment of banks' credit risk measurement models and tools related to underwriting, account management, and regulatory capital requirements. In addition, the division has an active research program that contributes to the general understanding of quantitative modeling issues in financial economics and applied econometrics in particular, and banking issues in general. Staff conduct original research on quantitative issues related to the development of statistically sound credit-risk models and integrate the knowledge gained into the supervisory process. Credit RAD staff also actively participate as quantitative experts in intra-agency, inter-agency or international policy working groups to support the development of policy.
The Enterprise Risk Analysis Division advises national bank examiners, bankers, and policy makers on the emerging quantitative-modeling disciplines that produce risk-management-information and valuation models at the enterprise level. Generally, these types of models take a comprehensive view of risk, recognizing, for example, that enterprise risk models should capture both market risk and credit risk. Thus, Enterprise Risk Analysis Division takes a “portfolio” view of risk.
The Market Risk Analysis Division advises and works with national bank examiners and advise OCC senior management on modeling and analytical issues related to capital market activities of large national banks including derivatives trading, asset liability management, market and counter party risk management, asset management and stress testing. Market RAD also conducts research in those areas and delivers expert analysis of policy issues related to these capital market activities.