GovWire

The Government Actuarys Department (GAD) has set up a cross-government Credit Risk Group for people in government departments, arms length bodies and public sector organisations who manage loans and financial guarantees.

Loans and financial guarantees are frequently used across government to deliver policy objectives, such as improving access to finance for small businesses, or increasing mortgage availability for first time buyers with low deposits.

This means that expertise in credit risk, including:

• designing
• managing
• modelling
• financial reporting of loans and financial guarantees

is therefore spread throughout government.

At GAD we help many public sector organisations to understand, model, and report their credit risk exposure. The benefits of closer collaboration between public sector organisations on credit risk were clear to us, and so in 2022 we set up the Credit Risk Group.

Collaboration

GADs aims for the group include spreading good practice and promoting collaboration around government. The Credit Risk Group is a forum where attendees can learn from each other about different aspects of credit risk such as:

• approaches to modelling credit risk and setting assumptions
• data sources (e.g., ratings agency data and tools)
• the impact of climate change on credit risk
• the macro-economic impact on credit risk

External speakers

As well as hearing from public sector experts in credit risk and related areas, the group also hears from a range of external speakers, such as:

• economic forecasters and research institutes
• rating agencies
• auditors
• central banks and multilateral development banks