Patent ID: 7792742

Claim:
A method, implemented using a data processing system, for reducing capital required to be held in connection with a subject pool of loans comprising: obtaining, as an input to the data processing system, a credit risk rating of the loans in the subject pool; allocating, using the data processing system, credit risk for the subject pool among a plurality of parties, based on the credit risk rating and a loss performance of the subject pool in comparison to a reference pool of loans having similar characteristics to the loans in the subject pool; applying, using the data processing system, capital reserve requirements to the subject pool based on the credit risk rating and the credit risk allocated to a party subject to the capital reserve requirements for loans in the subject pool; calculating, using the data processing system, an amount of capital to hold against the subject pool based on application of the capital reserve requirements; and providing an indication of the amount of capital to hold to the party.