Significant Risk Transfer

The companion workbooks

Julian R. Sterling

Every figure printed in the book comes out of these six files, and they come with the book. Each one carries a Controls sheet that compares its own calculation to the value printed on the page. Nothing is locked, protected or watermarked.

No sign-up, no email address, nothing to agree to.

The reference portfolio and the IRB capital calculation

Seven rating buckets, the asset correlation and the SME size adjustment written out as formulas, the maturity adjustment, and KIRB derived rather than typed in.

Capital_Model.xlsx · XLSX · 8 KB

SEC-IRBA, for any tranche you enter

Attachment, detachment, the p-factor picking its own coefficient row, the 1250 percent and straddling cases, and an STS flag that halves p and drops the floor to 10 percent.

Tranche_Capital.xlsx · XLSX · 7 KB

What the trade costs, and what it releases

The margin rather than the coupon, the collateral round-trip, return on equity before and after, and both of the bank's break-even margins.

Bank_Economics.xlsx · XLSX · 7 KB

The tranche from the fund's side

Coupons, write-downs, pro-rata repayments and the internal rate of return, with and without leverage. The control sheet checks that principal repaid plus losses equals the notional.

Investor_Return.xlsx · XLSX · 7 KB

Both thresholds on one sheet

The bank's ceiling, the investor's floor, the range at every plausible hurdle rate, and what each lever is worth in return on equity.

Bargaining_Range.xlsx · XLSX · 7 KB

An empty skeleton for a portfolio of your own

Enter your buckets and read your own KIRB, your own capital, and the minimum detachment point below which a structure destroys capital instead of releasing it.

Portfolio_Template.xlsx · XLSX · 9 KB

Download all six, plus the notes  (45 KB)

Two of these are the model that produced the book. Three are working tools with the book’s transaction pre-loaded and meant to be overwritten with yours. One is an empty skeleton.

If a Controls sheet ever shows anything other than zero failures, the workbook is wrong and I would like to know — the whole point of publishing them is that they can be checked.

Articles on this book

Also by Julian R. Sterling

The other books with companion files. The full list of titles is on the author page.