What is portfolio model in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: portfolio model

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Allows the effects of portfolios that arise from the correlation of the constituents of the portfolios when counterparty risks are aggregated to be taken into account. The result of a portfolio model is usually a distribution of the future values or value changes of the portfolio. Such changes may arise from defaults default-oriented portfolio model or changes in the credit ratings market-value oriented portfolio model of the constituents of the portfolio. Key figures, such as the credit value at risk and the risk amounts of the portfolio constituents, are calculated from...

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• Key Concepts: 
  The portfolio model in SAP FS-BA-PM-CR Credit Risk Management is a tool used to assess the creditworthiness of a customer. It uses a variety of factors, such as the customer's financial history, payment history, and other relevant data, to determine the risk associated with extending credit to the customer. The model also takes into account the customer's current financial situation and any potential changes that may occur in the future. 
  
  How to use it: 
  The portfolio model in SAP FS-BA-PM-CR Credit Risk Management can be used to assess the creditworthiness of a customer by inputting relevant data into the system. This data includes the customer's financial history, payment history, and other relevant information. The model then uses this data to calculate the risk associated with extending credit to the customer. 
  
  Tips & Tricks: 
  When using the portfolio model in SAP FS-BA-PM-CR Credit Risk Management, it is important to ensure that all relevant data is inputted accurately and completely. This will ensure that the model can accurately assess the risk associated with extending credit to the customer. Additionally, it is important to regularly review and update the data inputted into the system in order to ensure that it remains up-to-date and accurate. 
  
  Related Information: 
  The portfolio model in SAP FS-BA-PM-CR Credit Risk Management is part of a larger suite of tools used for credit risk management. Other tools include credit scoring models, stress testing models, and capital adequacy models. Additionally, there are various regulations and guidelines that must be followed when using these tools in order to ensure compliance with applicable laws and regulations.