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IRA Awarded Contract to Supply Bank Ratings to the Securities and Exchange Commission
October 30, 2009
IRA Awarded Contact to Supply Bank Ratings to the SEC

Institutional Risk Analytics, a unit of Lord, Whalen LLC, has been awarded a contract by the Securities and Exchange Commission to supply commercially available financial ratings of banks, thrifts and holding companies. The award was made pursuant to solicitation SECHQ1-09-Q-9006.

The ratings that will be provided to the SEC are part of the IRA Bank Monitor, a unique performance and risk model of all FDIC insured depository institutions, including a variety of financial tests, Basel II benchmarks, stress ratings and risk metrics.

IRA provides ratings for all US banks and public companies, and customized analytics tools and advisory services, to support bank safety and soundness monitoring, counterparty credit and/or operational risk surveillance, and investment banking, valuation and due-diligence tasks.

IRA provides two versions of the IRA Bank Monitor to meet the needs of consumers and professionals. The consumer version of the IRA Bank Monitor may be accessed via our Bank Cart on our consumer portal (www.irabankratings.com). Institutional, commercial and government customers may access the professional version of the IRA Bank Monitor online at (www.institutionalriskanalytics.com).

Questions? Comments? info@institutionalriskanalytics.com



IRA Participates in PRMIA Event in Washington Focused on Systemic Risks and Solutions
October 16, 2009

IRA is participating in the next full-day event organized by the Washington DC Chapter of Professional Risk Managers International Association, "Regulatory Reform: Defining Issues and Tasks to Enhance Systemic Stability," on November 4, 2009 at the FDIC Seidman Center. The event link is below:

http://www.prmia.org/events/view_events.php?eventID=3576

Hosted by the FDIC Corporate University and co-sponsored by the Office of Thrift Supervision and the CFA Society of Washington, this full day event features a number of excellent speakers, including former Bear Stearns CEO Alan Schwartz, David Coulter of Warburg Pincus, and James Rickards, former general counsel of LTCM.  The panels also feature Achim Deubel of Finpolconsutl in Berlin and Paul Miller from FBR. FDIC Chairman Sheila Bair is scheduled to make remarks at luncheon. And IRA co-founder Christopher Whalen will serve as MC and as discussant. Whalen is a regional director of PRMIA's DC chapter.

This event is closed to the media and is conducted under Chattam House Rules. The cost of registration is $25 for full PRMIA and CFRA members, $50 for non-members. Members of the public may register for the event by going to the PRMIA web site and registering for the event.  When you register, you have the option to join PRMIA, which is free for basic membership.  At the end of the registration process, you are given the option to register without joining PRMIA. 

Any members of the state and federal financial supervisory community who wish to attend the event free of charge may contact us directly (email link).  Regulatory personnel may also arrange to stay at the Seidman Center and will be given details upon registration. A full list of presenters follows below:

Sheila C. Bair, Chairman
Federal Deposit Insurance Corporation

Alan Schwartz, Executive Chairman
Guggenheim Partners, LLC

Pat Robinson, Assistant General Counsel
Board of Governors of the Federal Reserve System

John V. Thomas, Deputy General Counsel
Federal Deposit Insurance Corporation

Dr. David Rowe, Executive VP
SunGard

Andrew Jent, President
Hayman Capital Partners

Alan Boyce, President
Adecoagro

Michael Pomerleano, Lead Financial Specialist
World Bank

Matt McFarland, Director of Credit Derivatives
CBOE

Hans-Joachim (Achim) Duebel, CEO
Finpolconsult.de

Greg Zerzan, 
Private Attorney

Christopher Laursen, Consultant
NERA

Alex J. Pollock, Resident Fellow
American Enterprise Institute

Paul Miller, Managing Director
FBR Capital Markets

Mark Abbott, Managing Director
Guardian Life

James Rickards, Senior Managing Director
Omnis, Inc.

David Coulter, Managing Director
Warburg Pincus

Bert Ely, Principal
Ely & Co

Pamela Martin, Sr Supervisory Financial Analyst
Board of Governors of the Federal Reserve System

Randall Dodd, Senior Financial Sector Expert
International Monetary Fund

Ernest T. Patrikis, Partner
White & Case

Dilip Krishna, Engagement Partner NE Financial Services,
Teradata

Christopher Whalen, Managing Director
Institutional Risk Analytics/PRMIA DC Regional Director

Questions? Comments? info@institutionalriskanalytics.com



IRA Sponsors Distressed Servicing 2009 Conference by Housing Wire
October 1, 2009
IRA Sponsors Distressed Servicing 2009 Conference by Housing Wire

IRA is pleased to be a sponsor of the Distressed Servicing 2009 Conference Organized by Housing Wire and EuroCatalyst November 16-17, 2009, in Austin, TX. Housing Wire (www.housingwire.com) is a member of IRA's Affiliate Program, which gives portals and publications the right to display The Institutional Risk Analyst comments and our growing portfolio of automated data display tools.

Distressed Servicing 2009 is the first of its kind: a private, invitation-only event designed exclusively for senior executives and key thought leaders in the mortgage and financial industry. This year's event, in Austin, TX, promises to be one of the most anticipated industry events of 2009, and follows in the steps of prior EuroCatalyst events held across Europe in previous years. All attendees at Distressed Servicing 2009 must be approved and/or invited to attend the event; the event is closed to media.

Loan servicing has traditionally been regarded as the "back office" of institutions originating mortgages, but EuroCatalyst has dedicated years of effort to repositioning the servicing sector as the consumer and investor's front office. This change in "legacy" mindset is accompanied by the imperative for the entire industry to focus on the role and importance of servicers, who now stand at the front line of a battle in which shots are being fired from all directions.

With the rapid changes now underway in the loan origination and servicing channels, this event is extremely timely. For additional information about the program, speakers or registration details for this invitation-only event, please visit: http://www.distressedservicing.com

Questions? Comments? info@institutionalriskanalytics.com



IRA Releases Preliminary Q2 2009 Bank Stress Index Ratings
August 24, 2009
IRA Releases Preliminary Q2 2009 Bank Stress Index Ratings

In Q2 2009 the preliminary bank safety and soundness ratings calculated by the IRA Bank Monitor using the data from the FDIC indicate a dramatic climb in the stress in the US banking industry, up 23% to 6.87 in Q2 2009 (1995=1) vs. the preliminary Stress Index value of 5.57 in Q1 2009. The rate of change in the preliminary Bank Stress Index was lower than in the previous quarter, but the absolute stress test score is at record levels.  The final industry aggregate average Bank Stress Index calculated by IRA was 1.8 at the end of Q4 2008 and 2.36 as of Q1 2009, illustrating the degree of subsidies flowing into the larger banks, as discussed below. < /P>

IRA's unique automated system enables us to gather and process CALL reports in real time, as they become available on the FDIC CDR web facility. This facility cuts several weeks off the wait time for the public to access FDIC data, but some of the largest banks are still not released until the FDIC releases its own analysis of the quarterly data, roughly 60 days after the quarter close. Since the largest banks and/or the FDIC deliberately hold back the release of certain bank CALL reports until just prior to the press conference, the sample of CALL reports available via the FDIC CDR facility just prior to the FDIC press conference allows us to view the rest of the US banking industry "ex-big bank."

Q2 2009 "Ex-Big Bank": Less Worse Than Previous Quarter, But Still Climbing

Prior to the FDIC press conference in Q1 2009, IRA for the first time calculated a preliminary Banking Stress Index rating for the industry using the bank CALL reports that were available on the FDIC web site about 50 days after the quarter close. This preliminary Bank Stress Index rating included over 7,000 institutions, but excluded the largest banks and therefore provided a perspective on the rest of the industry.

Based on this methodology, in Q1 2009 our preliminary snapshot of this "ex-big bank" subset of the US banking industry shown via the Bank Stress Index jumped over 100% to a whopping 5.57 or half an order or magnitude above the 1995 benchmark year which is = 1. In Q2, using the same methodology with almost 7,000 institutions, the stress rating calculated by IRA was 6.87 vs. the 1995 benchmark year of 1, a smaller rate of increase but still a dramatic deterioration in banking industry performance compared even with the preliminary result in Q1 2009. < /P >

In Q1 2009, when IRA calculated the final Stress Index Results for the US banking industry, the average stress test score was just 2.36, reflecting the enormous public sector subsidies that are flowing through the largest US banks. Whereas in past years the large banks have tended to skew the stress test scores of the industry higher, indicating greater stress, in Q1 and very likely in Q2 2009, when we calculate the final Bank Stress Index score for the entire industry in about a week, the results likely will be well below the 6.87 preliminary score that we are releasing today.

Based on our preliminary review of the individual bank reports, the apparent reasons for this large increase in stress are the number of banks that delivered deteriorating performance in terms of realized losses or charge-offs and/or bank efficiency.  We see indicators of a continued migration of banks from the A+ range where stress fall below the index benchmark year of 1.0, into the A range, indicating more banks are now feeling the effects of economic conditions regardless of the business practice models they've had in place.

In prior quarters, banks wound up getting "F" grades because they were barely making money; that is, they had small but positive net incomes that produced ROE's sufficiently below industry averages to indicate elevated business operating stress. A lot of these institutions were suffering due to mark-to-market accounting, goodwill write-downs and other ROE issues.

The trend in the US banking industry appears to be shifting to realized losses and degraded operating performance as measured by efficiency.  Charge-offs and degradation of bank efficiency seem to be the leading factors in higher Bank Stress Index scores. Notice, for example, that the number of banks rated "F" in Q1 actually fell vs. year-end 2008, but based on preliminary Q2 results, the number of banks rated "F" by the IRA Bank Monitor is already above the Q1 levels based upon the final data from the FDIC.

About Institutional Risk Analytics

The IRA Bank Monitor and IRA Banking Stress Index are services of Institutional Risk Analytics, the provider of customized risk management solutions and advisory services to global enterprises. IRA now provides two channels for consumers of bank information:

Consumer: Via the new www.irabankratings.com portal, users of the IRA Bank Cart can access data and distilled benchmarks for all US banks at an affordable price. Of note, IRA just announced a $1,000, all-you-can eat annual subscription option for the Bank Cart that gives users access to four quarters of Banking Stress Index ratings for all FDIC-insured depositories covered by The IRA Bank Monitor.

Professional: Via the www.institutionalriskanalytics.com portal, professional users who are subscribers to The IRA Bank Monitor and IRA Advisory Service may access powerful analytics tools and ratings, including IRA's unique and objective Bank Stress Index stress tests, the distilled and subjective CAMELS-type ratings synthesized by The IRA Bank Monitor using public FDIC data, and the subjective outlook ratings provided in The IRA Advisory Service, which provide our near-term, subjective assessment of the operating outlook for the subject given particular and macro factors.

For additional information, please visit our web site: www.institutionalriskanalytics.com

Questions? Comments? info@institutionalriskanalytics.com



The International Financial Crisis: Have the Rules of Finance Changed?
July 22, 2009


IRA co-founder Christopher Whalen will be participating in the Twelfth Annual International Banking Conference hosted by the Federal Reserve Bank of Chicago. Entitled "The International Financial Crisis: Have the Rules of Finance Changed?," the conference will be held between September 24-25 at the FRB Chicago's HQ, 230 S. LaSalle Street. Other participants include Ted Truman, Robert Steel of Wells Fargo and Andrew Sheng from China's bank regulatory commission. For more information or to register for the conference, please click the link below:

http://www.chicagofed.org/news_and_conferences/conferences_and_events/2009_international.cfm




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