Credit Risk Management

Traditional means of evaluating credit risk have become insufficient as the number and complexity of credit assets has increased dramatically. Many indicators of credit worthiness are hidden from fundamental analysis through off-balance-sheet accounting. As a result, credit analysts are less able to spot potential credit risks. In addition, the payoff profile with credit-risky investments (i.e., losses from losers far exceed gains from winners) has led certain investors to put more effort into avoiding losers than into picking winners.

MSCI Barra's credit product, Barra Credit, is a collection of tools that screen, select, monitor and value credit-risky investments. It provides quantitative filters for narrowing a broad universe of assets down to an workable number. Market-implied measures give the asset manager information to help the manager select desired assets. Market monitors allow the asset manager to monitor assets and spot emerging problems and opportunities. Learn more about Barra Credit.