CreditRiskMonitor to License Counterparty Quality Scores From Institutional Risk Analytics

VALLEY COTTAGE, N.Y. and TORRANCE, Calif., May 1, 2011 /PRNewswire/ -- CreditRiskMonitor (Pink Sheets: CRMZ) and Institutional Risk Analytics ("IRA") announced today a licensing agreement that will provide all CreditRiskMonitor subscribers access to the new IRA Counterparty Quality Scores ("CQ Scores").  The CQ Scores are designed to give depositors and other bank counterparties warning of possible failure.  

The CQ Scores are part of IRA's Bank Monitor ratings and analytics system and were specifically developed to complement corporate ratings tools such as CRMZ's proven FRISK® scores.  "Our bank stress letter ratings are designed for consumers," notes IRA CEO Dennis Santiago, who leads the design of IRA's ratings and analytics products.  "We developed the CQ Scores with the team at CRMZ specifically to meet the needs of corporate treasurers, underwriters and risk managers who need to make decisions on commercial credit."

CreditRiskMonitor subscribers will now have access to CQ Scores for about 7,000 FDIC insured banks and 5,000 bank holding companies.  The addition of the new CQ Scores to the over 25,000 FRISK® score ratings already available on public companies world-wide represents a significant increase in predictive-score coverage available on the CreditRiskMonitor service.

"The CQ Score is an exciting addition to our credit analysis service, for subscribers who want to quickly evaluate and monitor their cash management and letter-of-credit banking relationships," said Jerry Flum, CEO of CreditRiskMonitor.  "We did a complete due diligence review of the CQ Score over a whole business cycle, and are very impressed with its ability to identify those banks most likely to be 'resolved' by banking regulators.  The CQ Score is an efficient first step in a review process for bank counterparties.  Plus, as has been our practice, we have added this exciting new capability to our service at no additional charge to subscribers.

The CQ Scores cover nearly all public and privately held banks, savings and loan institutions, and bank holding companies in the U.S.  The CQ Scores are generated by a proprietary model designed by IRA to rank banks according to the likelihood of failure, being 'resolved' by the bank regulators.  Data used in the model are derived entirely from objective fundamental data that banks are required to file with the FDIC.

"We believe that the U.S. banking industry is now in a new period of crisis," notes IRA co-founder and Managing Director Christopher Whalen, who recently issued a report downgrading the outlook on operating results for the U.S. banking sector.  "We expect foreclosures to peak in 2011, and a continued wave of bank failures during 2011 and 2012."  

Whalen, who runs IRA's advisory practice and is author of the book "Inflated: How Money and Debt Built the American Dream" adds, "Some banks have recapitalized successfully, but most have not.  Smart CFOs and Treasurers will keep a watchful eye on their banking counterparties, especially this year and next, and doing this via CreditRiskMonitor is an excellent value."

Because of its unique approach to collecting and analyzing quarterly FDIC bank data, IRA is able to reduce the traditional 60-day+ delay and deliver a CQ Score as little as 30 days after the quarter end.  The CQ Score utilizes a simple ratings scale from 1 to 8, with the highest number being the top (least risky) rating score.  

"More recently," notes Flum, "we looked at every bank failure in the past 12 months, and we saw that nearly all of the failed banks had low CQ Scores for at least two quarters before being 'resolved.' At the same time, we found that CQ Scores in the risky 1 to 4 range are unusual, shown for only a small fraction of banks.  We feel confident that the CQ Scores are going to be a great value for CRMZ customers.  As the U.S. banking system works its way through the next couple of years of necessary consolidation and renewal, we want to help our users maximize business opportunities and avoid risk."

About CreditRiskMonitor

CreditRiskMonitor (www.crmz.com) is an Internet-based publisher of financial information, designed to save time for busy corporate credit professionals that competes with Dun & Bradstreet, Equifax and Experian.

About Institutional Risk Analytics

Institutional Risk Analytics (www.institutionalriskanalytics.com) is a provider of bank ratings, custom analytics and consulting services for credit officers, auditors, corporate lenders, regulators, investment managers and other decision makers.  IRA publishes standardized benchmarks, ratings and soundness metrics covering both U.S. banking institutions and corporate obligors.  

Safe Harbor Statement

Certain statements in this press release, including statements prefaced by the words "anticipates", "estimates", "believes", "expects" or words of similar meaning, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, expectations or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including, among others, those risks, uncertainties and factors referenced from time to time as "risk factors" or otherwise in the Company's Registration Statements or Securities and Exchange Commission Reports.  We disclaim any intention or obligation to revise any forward-looking statements, whether as a result of new information, a future event, or otherwise.

SOURCE CreditRiskMonitor