How do officialized books make it to credit?

In the past few months much focus has been put on understanding VAR and how
it is calculated (through RisktRAC). However, everyone should note that the
credit department also receives our information. Market risk and credit risk
are inherently different, with different requirements. This memo serves as a
reminder of what some of the key differences are, how the credit system uses
RisktRAC differently from market risk, how this affects us, what some key
problems are in the credit system caused by our data, and changes to be made
by risk management groups.

differences are between credit and market risk - you all know this, but many
of your ba's don't.
when a book is flat it still has an effect on credit. Flat books must be
officialized
market risk is keyed off positions and curves. When we make money, market
risk is reduced. Credit risk is keyed off positions with customers. When we
make money, credit risk is increased, as people owe us more money.

how the credit system uses RisktRAC differently from market risk
Market risk picks up all officialized books. If a book is not officialized
it does not pick the book up.
Credit picks up all officalized books. If a book is not officialized, it
picks up the previous day's position. Therefore, if positions in book A are
moved to book B, and A is no longer officialized, credit picks up the
previous day's position for book A. As a result, if a book is no longer
used, please officialize it the first day it is no longer used, so credit
will pick up 0 on a go forward basis.
Market risk is not concerned with counterparty codes and names.
Credit needs correct counterparty codes and names. In recent months, the
counterparty information has deteriorated. Enron official counterparty names
need to be used so they flow properly to credit.

what are some key problems in the credit system caused by our data
As referenced above: correct counterparty names and books with 0 positions
not being officialized so credit picks up previous day info.
As a takeaway from this message please ensure only correct counterparty names
are used and that if a book has 0 positions that it is officialized the first
day it has 0 positions.

If you have specific questions about credit, please call Debbie Brackett, at
X35856.