WASHINGTON - A unit of Moody's Investors Service and Risk Metrics said Tuesday that they have formed a strategic partnership to integrate their risk assessment tools for bankers.
The move will combine credit risk modeling programs created by Moody's Risk Management Services with a portfolio risk management program produced by New York-based RiskMetrics.
The Moody's product, called RiskCalc, uses a database of thousands of credit defaults - by both public and private firms - to estimate the default probability of specific loans. RiskMetrics' CreditManager software is used to identify concentrations of risk across an entire loan portfolio.
Subscribers will still have to license the products separately, but according to Peter J. Bernard, head of RiskMetrics' institutional risk business, they will work together "seamlessly." Under the agreement, users of CreditManager will no longer need to produce credit ratings for their borrowers, but will have the option to connect directly to the RiskCalc Web site, which will download Moody's ratings automatically.
The companies said they expect the two services to be fully integrated by November. The combination will allow both companies to compete more effectively with San Francisco-based KMV Corp., which sells both credit risk and portfolio management tools.