Solutions / Lacima Analytics / Credit Risk

Potential Future Exposure (PFE)

 

Calculate current and future potential credit risk (PFE) exposures.

Your Potential Future Exposure (PFE) Questions

How do I calculate credit risk exposures and develop strategies to mitigate them?

How can I assess and manage counterparty risk including taking pre-emptive action?

How can I understand how extreme market conditions could impact the exposure to my counterparties?

Can I reduce the time and resources spent on credit risk assessment and management?

How can I manage a complex and diverse portfolio of counterparties with varying levels of risk?

Accurate PFE calculation helps energy and commodities businesses manage counterparty default risk, cope with market volatility, maintain liquidity, comply with regulations, and make informed strategic decisions. Lacima’s PFE solution enhances operational efficiency, improves risk mitigation, and supports better portfolio management, ultimately leading to long term business sustainability and growth.

Our Potential Future Exposure (PFE) Solution

Manage the probabilistic side of credit including current exposure, potential future exposure, and stress testing.

Access advanced proprietary analytics to calculate Mark-to-Market, current exposure, potential future exposure, reverse current exposure, reverse PFE, Credit VaR and more.

View PFE by entity, counterparty & netting agreement.
A screenshot of a Potential Future Earnings (PFE) report and chart in Lacima Analytics.

The Potential Future Exposure (PFE) Features

Flexible input screens allow greater control over
Potential Future Earnings (PFE) analysis.
A screenshot of the Potential Future Earnings (PFE) input screen in Lacima Analytics.
  • Manage a wide range of credit risk metrics through a single application including:
    • Current Exposure
    • Reverse Current Exposure
    • Potential Future Exposure
    • Reverse PFE
    • PFE with Collateral
    • Credit VaR
    • Credit Reserves
    • Component PFE
  • Calculate Mark-to-Market exposure using advanced analytics and analytical pricing formulas
  • Calculate full distributions for potential credit risk exposure
  • Proven computational models reduce analysis timeframes
  • Stress and scenario testing tools help evaluate and prepare for the impact of adverse market conditions
  • Set credit tolerance limits and receive alerts when approaching or breaching limits, with business processes to clear breach provided^
  • Realistic modelling links variables for accurate credit risk forecasting and management
  • View PFE by entity, counterparty & netting agreement
^ Integrate Lacima Analytics’ Limit and Breach module for a flexible, integrated limit management framework with built-in workflow.

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