Northern Rock Unsecured Lending Project
Volterra recently completed a project with Northern Rock to support their application for IRB status under the Basel framework for calculating regulatory capital. The project was in the unsecured lending area and involved significant challenges, including the need to develop new methodology to properly address the problems faced. The project was a great success, helping Northern Rock to achieve their goal of IRB status for their unsecured lending portfolios in the desired timescale. Following commissioning in late April, work was completed in a timely fashion to allow for internal review and presentation to the FSA in line with Northern Rock’s stated objective. Northern Rock's IRB waiver was subsequently posted on the FSA website on 29 June, covering all portfolios including unsecured lending.
Northern Rock’s Andy Johnson said: Volterra worked in partnership with us on our project, providing valuable economic insight, statistical analysis and applying this within the Basel II IRB framework. They didn’t bring an approach off the shelf, but helped us to address specific issues. We very much enjoyed working with Volterra and look forward to continuing the relationship in the future.
- Andy Johnson, Assistant Director, Credit Scoring, Northern Rock
London First: Bridget speaks at 'Building the Capital's Capital'
London First’s week long set of seminars on ‘Building the Capital’s Capital’ came to an end with a concluding session at which Bridget spoke alongside the incoming Minister responsible for the City, Kitty Ussher, and Vincent Cable, Shadow Chancellor for the Liberal Democrats. The series of events looked at the challenges facing the city in general and financial services in particular and was focused on discussion with groups of senior executives in London. The final event was the first speaking engagement for the new Minister.
'Science' of happiness
The idea that Government policy should be focused more explicitly on promoting happiness has been gaining support. There is a whole new academic industry devoted to the 'science' of happiness.
But much of this work is no better than pure charlatanism dressed up in regression models.
In the Financial Times comment section of 17 July Paul Ormerod explains why, click here to download the FT article. A longer version is in the April edition of Prospect magazine, click here to find out more. The full account is published this month by the Institute of Economic Affairs, click here to find out more.
GLA Economics celebrates 5th Birthday at City Hall
Several members of Volterra staff helped to celebrate GLA Economics 5th Birthday this month at a party at City Hall. Volterra has been involved with GLA Economics from the outset and Bridget Rosewell, in her capacity as Consultant Chief Economist to the GLA, summarised some of the highs of the first five years. When GLA Economics started, few believed that it was reasonable to expect London to continue growing, but this is now well accepted. The work on agglomeration - the economic benefits of getting together - has been a key area for GLA Economics. Agglomeration is now a term in use for public policy analysis and a central basis of the case for Crossrail. Volterra has contributed economic analysis in these areas and more.
Greg presents at two conferences in July
Greg presented at two conferences in July. The first conference was on measurement errors, where Greg spoke on the impact of the current National Accounts methodology on the measure of London's output. At the second conference, which was on social networks, Greg gave two talks, firstly on the recent research Volterra performed for the FSA in using networks to evaluate the potential size of markets for new products and secondly the network of influence established by Protestant burnings during the 16th century. Very diverse topics but all the presentations were well received. For more information on these topics email Greg.
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