How is the Invictus Capital Assessment Model (ICAM)™ different from other bank models?
The interrelationships between assets and liabilities and the rates and returns associated with them are extremely complex and subject to a host of vagaries of the marketplace. Several modeling systems have developed extremely sophisticated algorithms and relationships to deal with these varying circumstances, which means if you feed in extensive, detailed data on interest rates, liquidity, and a variety of disintermediation options, you can get a near-infinite range of forecasts of bank performance and capital adequacy. But they come with a catch. Because they’re typically based on regression analysis, they depend on data developed in so-called “normal” economic times that no longer exist in today’s crisis-ridden financial environment. That makes it extremely difficult for management and the board to rely on their accuracy, to analyze the robustness of the bank’s balance sheet, to find its hidden weak points, or to devise policies that will allow it to stand up to the adverse credit a
