New York, NY – The International Association of Credit Portfolio Managers today announced it has elected Sean Kavanagh, Global Head of the Loan Exposure Management Group at Deutsche Bank, 2011 Chair and Derek Saunders, Global Head of Portfolio Management at HSBC, Vice Chair. The IACPM has also selected KeyCorp’s Jeffery Weaver as Treasurer and ING’s Tamar Joulia as Secretary.
“This is a critically important point in time for credit portfolio managers and I look forward to serving as Chair of the IACPM,” commented Mr. Kavanagh. “Our members performed well during the financial crisis but are now faced with a new set of challenges, including substantial new regulation and higher capital requirements.”
Credit portfolio managers are generally responsible for managing risk and return in large corporate loan portfolios at financial institutions. The Association currently has 90 member firms, including banks, insurance companies and other institutions in the U.S., Europe, Asia, Africa and Australia. The IACPM expects to spend much of its time this year working with global regulators, as they implement new regulations in response to the 2008 financial crisis. The Association wants to ensure that regulators reduce the risk of another crisis without unduly restricting credit availability.
“We need to continue our dialogue with regulators,” said Mr. Kavanagh. “We want to help increase transparency and reduce risk while also making sure we avoid unintended and potentially negative consequences.”
Critically important, the IACPM has just submitted a lengthy comment letter to the International Accounting Standards Board regarding the Association’s longstanding concern about the accounting mismatch that occurs in credit portfolio management where items being economically hedged are accounted for on an historical cost basis while hedges, specifically credit default swaps, are accounted for at fair value.
“Credit default swaps offer portfolio managers an effective economic hedge against credit risk and have become a key part of most large institutions’ credit risk management practices,” said Som-lok Leung, Executive Director of the IACPM. “Thus, it is essential that we reconcile the mismatch between the two accounting treatments.”
At Deutsche Bank, Mr. Kavanagh and his team are responsible for pricing, hedging and managing the credit risk of loans and lending-related commitments for the Corporate and Investment Bank. Mr. Kavanagh joined Deutsche Bank in 2001 and has worked in the Loan Exposure Management Group since 2003. Under his leadership, the group has earned Risk magazine’s Credit Portfolio Manager of the Year award three times in the past five years.
At HSBC, Mr. Saunders is implementing an active portfolio management strategy with a global team of 42 professionals covering key disciplines in all core geographies. The initiative is aligned with the broader Global Banking and Markets strategic business model and spans risk/return at origination, performance measures, portfolio composition and secondary market execution.
Also serving on the Board of Directors in 2011, the other directors are James Baldino, Union Bank of California, Oliver Belorgey, Credit Agricole, Sarah Cheriton, LloydsTSB PLC, David Crippa, Standard Chartered, Lori Evangel, MetLife, Yuji Harada, Mitsubishi UFJ, Richard Henshall, Westpac, Mark Hughes, Royal Bank of Canada and IACPM Chair Emeritus, Tom Johannessen, Barclays Capital, Vipin Ramani, Bank of America and Kevin Starrett, Citigroup.
The IACPM, with 90 member institutions located in 14 countries, is a professional association dedicated to the advancement of credit portfolio management. Founded in 2001, the organization’s programs of meetings, studies, research and collaboration are designed to increase awareness of the value and function of credit portfolio management among financial markets worldwide, and to discuss and resolve issues of common interest to its members.