RE: Oslo Credit Watch Report

Dear Stacey-

What is your view point on this? It appears to me that what Rod is saying =
is=20
that this is not a valid doorstep finding because of the other controls tha=
t=20
they have around the process. However, I would think that commercial havin=
g=20
a credit watch report would be beneficial at the beginning of each trading=
=20
day (or at least a list of the CP's that are approaching their limits) so=
=20
they know what CP to focus on. What are thoughts? Does commercial here ge=
t=20
a credit watch report daily? Do they use it? Please call me to discuss wh=
en=20
you get a chance. Thanks, Stacey. I appreciate your input.

Christy

From: Roderick Nelson/Enron@EUEnronXGate on 06/25/2001 05:55 PM GDT
To: Christy Lobusch/NA/Enron@Enron, Minna Taponen/Enron@EUEnronXGate
cc: =20

Subject: RE: Oslo Credit Watch Report

Let=01,s discuss when Minna returns (next Monday). Simply providing the=20
exposure relative to credit lines does not indicate that the next transacti=
on=20
is credit approved =01) and I am concerned that this would be construed as=
=20
such. Because positions are volatile, the tenor and size of the next=20
transaction also determine approval. As well, contractual terms play a rol=
e=20
in the approval of the next transaction. For example, with margining right=
s=20
above a contractual level, exposure can be actively managed. Clearly, a re=
al=20
time approach which capture exposure and potential exposure against =01+sof=
t=01,=20
and contractual lines would be ideal. Senior management in RAC is aware of=
=20
this objective and efforts are underway to improve systems towards this end=
. =20

Nevertheless, if you think that a CreditWatch list would assist the=20
commercial team in managing credit risk in this market, I am sure that some=
=20
report could be generated periodically. =20

Rod

-----Original Message-----
From: Lobusch, Christy =20
Sent: 25 June 2001 17:13
To: Nelson, Roderick; Taponen, Minna
Subject: RE: Oslo Credit Watch Report

Dear Rod/Minna-

Thank you for the response. I apologize for the confusion. I understand=
=20
what is being said about the allocation of resources, but how is commercial=
=20
informed when a counterparty is approaching their credit limit? I think th=
e=20
finding is that a real-time credit system would be ideal, but that the=20
current IT environment does not support it. I think that what is being sai=
d=20
is that commercial should understand where counterparties stand before the=
=20
trading day starts. Or even if just the report lists those counterparties=
=20
which are approaching their limits. Is that something that is easily pulle=
d=20
together on a daily basis? Please advise. Thanks,

Christy Lobusch
---------------------- Forwarded by Christy Lobusch/NA/Enron on 06/25/2001=
=20
11:01 AM ---------------------------
From: Roderick Nelson/Enron@EUEnronXGate on 06/25/2001 12:17 PM GDT
To: Debbie R Brackett/ENRON@enronXgate, Christy Lobusch/NA/Enron@Enron, Min=
na=20
Taponen/Enron@EUEnronXGate, Orjan Agdesteen/Enron@EUEnronXgate
cc: =20

Subject: RE: Oslo Credit Watch Report

Christy, Orjan:

I apologize for not responding earlier. To be perfectly honest, I had=20
assumed that Minna Taponen (who manages credit risk for Nordic) was copied =
on=20
the correspondence. We should probably speak to clarify on issues, but bel=
ow=20
is my initial comment.

Currently, credit is managed on a pre-approval consent basis. No counterpar=
ty=20
is approved until the commercial team has made such a request and a review =
is=20
performed and lines set. This is not say that the =01+rules=01, are not=20
occasionally violated, but the credit approval system is in place. RAC/CRM=
=20
could generate a CreditWatch list, but this would not necessarily improve t=
he=20
process or reduce credit risk. Minna could produce and maintain such a=20
report, but I would require to justify that this is a worthwhile allocation=
=20
of her resource.

Thanks,
Rod

-----Original Message-----
From: Brackett, Debbie R. =20
Sent: 20 June 2001 16:41
To: Nelson, Roderick
Subject: FW: Oslo Credit Watch Report

Your name is all over this...how would you like me to handle? We can do thi=
s=20
from a systems perspective easily but I don't think that's the issue.

Let me know.

Deb

-----Original Message-----
From: Lobusch, Christy =20
Sent: Wednesday, June 20, 2001 10:35 AM
To: Brackett, Debbie R.
Subject: Oslo Credit Watch Report

Dear Debbie-

I don't know if you are the person that I need to talk to, but I was hoping=
=20
you could point me to who I need to talk to about getting a credit watch=20
report distributed to the Oslo commercial team. Also, do you know if the=
=20
issue is really that the report is not prepared and distributed or is it ju=
st=20
that the report is not distributed. Please advise. Thanks, Debbie.

Christy
---------------------- Forwarded by Christy Lobusch/NA/Enron on 06/20/2001=
=20
10:32 AM ---------------------------
From: Beth Apollo/ENRON@enronXgate on 06/19/2001 02:34 PM
To: Christy Lobusch/NA/Enron@Enron
cc: =20

Subject: FW: Doorstep review Oslo - May 2001

can you chase this one down

-----Original Message-----
From: Horn, Cindy =20
Sent: Tuesday, June 19, 2001 3:57 AM
To: Apollo, Beth; Wilson, Shona
Cc: Agdesteen, Orjan; New, James; Jordan, Mike
Subject: FW: Doorstep review Oslo - May 2001

Beth, will your group follow up on this point now that we have sent this to=
=20
you for review? I am not sure what the process is but I thought your team=
=20
would be the ones to follow up and insure all the action points are address=
ed=20
and resolved. Let me know if there is anything further we should be doing.=
=20
Thanks Cindy

-----Original Message-----
From: Agdesteen, Orjan =20
Sent: 19 June 2001 09:51
To: Taponen, Minna
Cc: New, James; Horn, Cindy
Subject: Doorstep review Oslo - May 2001

Her'e sthe comments regardiong Credit from the Oslo review. Could you pleas=
e=20
adress this issue to someone in Credit and give me some feedback?

I've sent it to Rod Nelson several times as I thought he was the right=20
person, but he never gave any answer.

Thanks!

_rjan

Observation
No Credit Watch Report is distributed for commercial personnel to reference=
.

Root cause
Credit support has been managed in London by a RAC resource which has=20
prevented a complete set of credit tools from being developed. =20

Action step
Agree. Credit limit monitoring should be performed on a real time basis. Th=
is=20
is being restricted by the current IT environment. In the interim a daily=
=20
report should be prepared and distributed to traders showing counterparty=
=20
limits and current utilisation of those limits.

Responsible
Rod Nelson, Credit