Product

AbsolutePD® Stress Test Simulator

An add-on module to the APD model, the APD Stress Test Simulator module generates scenario-based PD predictions

Product Overview

AbsolutePD Stress Test Simulator generates scenario-based probability of default predictions at the individual obligor level, based on the set of Federal Reserve System (FRS) macroeconomic variables, and on the result of AbsolutePD®. 

Functioning as an add-on module to the APD modeling infrastructure, the APD Stress Test Simulator generates up to five scenarios based on different sets of macroeconomic variables, including three sets of FRS scenarios and two sets of user-defined scenarios.

How the Stress Test Simulator Works

1
Stress test through the business cycle

Stress testing provides measurable views of credit risk through economic cycles. Creating scenarios that are appropriate to your geographic location and local economy is essential to this process.

2
Predict loss at an individual level

Equifax's AbsolutePD Stress Test Simulator generates scenario-based PD predictions at the individual obligor level.
 

3
The product of preparation

As a result, lenders see lower operating costs; reduced hours complying with regulatory requirements; a bolstered reputation among external parties; and the ability to implement strategies for managing capital over a nine-quarter planning horizon.

A transparent, granular risk management system

AbsolutePD® Stress Test Simulator provides users with an effective, streamlined approach to complying with Federal Reserve Bank Comprehensive Capital Analysis and Reserve Requirements, resulting in lower operating costs and reduced managerial hours spent to fulfill compliance requirements.

Key Benefits

Streamline compliance

Spend less time complying with regulatory requirements.

Decrease costs

Lowers operating costs.

Build trust

Bolsters reputation among external parties through transparent system.

Prepare, prepare, prepare

Enables strategies for managing your capital over a nine-quarter planning horizon.

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Contact Us

To learn how AbsolutePD® Stress Test Simulator can improve your regulatory compliance and asset allocation, contact us.