Dear Stacey-

What is your view point on this?  It appears to me that what Rod is saying is that this is not a valid doorstep finding because of the other controls that they have around the process.  However, I would think that commercial having a credit watch report would be beneficial at the beginning of each trading day (or at least a list of the CP's that are approaching their limits) so they know what CP to focus on.  What are thoughts?  Does commercial here get a credit watch report daily?  Do they use it?  Please call me to discuss when you get a chance.  Thanks, Stacey.  I appreciate your input.

Christy


From:	Roderick Nelson/Enron@EUEnronXGate on 06/25/2001 05:55 PM GDT
To:	Christy Lobusch/NA/Enron@Enron, Minna Taponen/Enron@EUEnronXGate
cc:	 

Subject:	RE: Oslo Credit Watch Report

Let's discuss when Minna returns (next Monday).  Simply providing the exposure relative to credit lines does not indicate that the next transaction is credit approved - and I am concerned that this would be construed as such.  Because positions are volatile, the tenor and size of the next transaction also determine approval.  As well, contractual terms play a role in the approval of the next transaction.  For example, with margining rights above a contractual level, exposure can be actively managed.  Clearly, a real time approach which capture exposure and potential exposure against 'soft' and contractual lines would be ideal.  Senior management in RAC is aware of this objective and efforts are underway to improve systems towards this end.  

Nevertheless, if you think that a CreditWatch list would assist the commercial team in managing credit risk in this market, I am sure that some report could be generated periodically.  

Rod

 -----Original Message-----
From: 	Lobusch, Christy  
Sent:	25 June 2001 17:13
To:	Nelson, Roderick; Taponen, Minna
Subject:	RE: Oslo Credit Watch Report

Dear Rod/Minna-

Thank you for the response.  I apologize for the confusion.  I understand what is being said about the allocation of resources, but how is commercial informed when a counterparty is approaching their credit limit?  I think the finding is that a real-time credit system would be ideal, but that the current IT environment does not support it.  I think that what is being said is that commercial should understand where counterparties stand before the trading day starts.  Or even if just the report lists those counterparties which are approaching their limits.  Is that something that is easily pulled together on a daily basis?  Please advise.  Thanks,

Christy Lobusch
---------------------- Forwarded by Christy Lobusch/NA/Enron on 06/25/2001 11:01 AM ---------------------------
From:	Roderick Nelson/Enron@EUEnronXGate on 06/25/2001 12:17 PM GDT
To:	Debbie R Brackett/ENRON@enronXgate, Christy Lobusch/NA/Enron@Enron, Minna Taponen/Enron@EUEnronXGate, Orjan Agdesteen/Enron@EUEnronXgate
cc:	 

Subject:	RE: Oslo Credit Watch Report

Christy, Orjan:

I apologize for not responding earlier.  To be perfectly honest, I had assumed that Minna Taponen (who manages credit risk for Nordic) was copied on the correspondence.  We should probably speak to clarify on issues, but below is my initial comment.

Currently, credit is managed on a pre-approval consent basis. No counterparty is approved until the commercial team has made such a request and a review is performed and lines set.  This is not say that the 'rules' are not occasionally violated, but the credit approval system is in place.  RAC/CRM could generate a CreditWatch list, but this would not necessarily improve the process or reduce credit risk.  Minna could produce and maintain such a report, but I would require to justify that this is a worthwhile allocation of her resource.

Thanks,
Rod


 -----Original Message-----
From: 	Brackett, Debbie R.  
Sent:	20 June 2001 16:41
To:	Nelson, Roderick
Subject:	FW: Oslo Credit Watch Report

Your name is all over this...how would you like me to handle? We can do this from a systems perspective easily but I don't think that's the issue.

Let me know.

Deb



 -----Original Message-----
From: 	Lobusch, Christy  
Sent:	Wednesday, June 20, 2001 10:35 AM
To:	Brackett, Debbie R.
Subject:	Oslo Credit Watch Report

Dear Debbie-

I don't know if you are the person that I need to talk to, but I was hoping you could point me to who I need to talk to about getting a credit watch report distributed to the Oslo commercial team.  Also, do you know if the issue is really that the report is not prepared and distributed or is it just that the report is not distributed.  Please advise.  Thanks, Debbie.

Christy
---------------------- Forwarded by Christy Lobusch/NA/Enron on 06/20/2001 10:32 AM ---------------------------
From:	Beth Apollo/ENRON@enronXgate on 06/19/2001 02:34 PM
To:	Christy Lobusch/NA/Enron@Enron
cc:	 

Subject:	FW: Doorstep review Oslo - May 2001

can you chase this one down

 -----Original Message-----
From: 	Horn, Cindy  
Sent:	Tuesday, June 19, 2001 3:57 AM
To:	Apollo, Beth; Wilson, Shona
Cc:	Agdesteen, Orjan; New, James; Jordan, Mike
Subject:	FW: Doorstep review Oslo - May 2001

Beth, will your group follow up on this point now that we have sent this to you for review?  I am not sure what the process is but I thought your team would be the ones to follow up and insure all the action points are addressed and resolved.  Let me know if there is anything further we should be doing.  Thanks Cindy

 -----Original Message-----
From: 	Agdesteen, Orjan  
Sent:	19 June 2001 09:51
To:	Taponen, Minna
Cc:	New, James; Horn, Cindy
Subject:	Doorstep review Oslo - May 2001

Her'e sthe comments regardiong Credit from the Oslo review. Could you please adress this issue to someone in Credit and give me some feedback?

I've sent it to Rod Nelson several times as I thought he was the right person, but he never gave any answer.

Thanks!

?rjan



Observation
No Credit Watch Report is distributed for commercial personnel to reference.

Root cause
Credit support has been managed in London by a RAC resource which has prevented a complete set of credit tools from being developed.    


Action step
Agree. Credit limit monitoring should be performed on a real time basis. This is being restricted by the current IT environment. In the interim a daily report should be prepared and distributed to traders showing counterparty limits and current utilisation of those limits.


Responsible
Rod Nelson, Credit