FuriousBanker is an educational game series (in the serious game genre) developed by Open Risk to enable modern interactive eLearning for people working or studying to work in financial risk management. The game concepts and logic are directly derived from realistic situations and tools used in practice (but may have been simplified and/or dramatized).
Overview (Credit Detox Challenge)
In the credit detox challenge you emulate a credit portfolio manager. There are a number of important concepts to go over before you can master the game. These instructions go over the required concepts with links to further information and reading. While the game itself is a simplified (and accelerated) version of reality, the underlying credit and risk management concepts are not simplified. In particular calculations are performed (where applicable) with actual libraries and tools - in this case the concentrationMetrics Library and with reference to the documentation at the Open Risk Manual.
You inherited a pretty toxic credit portfolio. We don’t go over how this happened and the gory details of the situation. Your objective is to reduce its Credit Risk Concentration and more specifically its Name Concentration but (there is always a catch) while improving its profitability.
Installation and Starting the game
- Clone the github repository
- Install the requirements
- Run the game
git clone https://github.com/open-risk/FuriousBanker.git cd FuriousBanker pip install -r requirements.txt python FuriousBanker.py
If everything goes well you should be greeted by the game window as follows:
There is a lot going on here so let’s break it down. There are five important areas to master, denoted Area 1 to 5 in the following figure. We will go over them first in summary and later in more detail:
- Area 1 has the high level control buttons
- Area 2 displays the current portfolio holdings
- Area 3 has the game metrics and the remaining time
- Area 4 shows a current deal proposal (for a new loan) along with an existing load (for comparison)
- Area 5 has the buttons that indicate acceptance or rejection of the new proposal
- In Area 1 there are a number of buttons. If you click on Help you will get in-game instructions (if you read this web documentation you should be covered)
- The Restart button restarts the game at any point, so I you feel the situation is hopeless you can simply start over (there is no track record stored)
- The About button and Quit buttons have the obvious function
- The Web Docs button takes you to this webpage (assuming you are connected to the internet)
The game mechanics is fairly simple: Within an allocated amount of time you examine a number of proposals that arrive one at time against any of your existing positions. You either accept a new proposal or reject it (Area 5 Buttons). If you accept it, it replaces the existing position and a new proposal is generated. If you reject it a new proposal is generated (up to a limit)
The largest exposures of your current portfolio are shown on the right column (Area 2).
Each bar represents a loan. The length of the bar corresponds to loan size. The rest of the portfolio does not contribute to concentration and is not shown. To see any loan’s details simply click on a bar to select to the loan.
The characteristics of a loan are placed in the Compare column (Cyan color) of Area 3. These are the following:
- The expected loss (expressed as a percentage of size)
- The credit spread (also expressed as percentage)
- The loan size (in billions - we are talking real money here)
New Loan Proposals
You can see a new loan proposal on the left (green) column of Area 4. If you like the new loan you can accept it and thereby replace the currently selected (cyan) loan.
Your individual loan limit is 1 bln, so be careful with that money. Reject the proposed loan to get a new proposal. The economy generates a limited supply of new loans per season (N=100) so use them wisely!
The Loan Metrics
- The profitability of your portfolio is the difference between what you earn on each loan and what you expect to lose (on average), your expected loss. This is the so-called “ex-ante” profitability. It is shown as percentage of your total portfolio size.
- The concentration risk measure is based on the HHI index (weighter by expected loss). A portfolio with large concentrations of expected loss will have a larger index.
- Your game score combines profitability and concentration so you will need to manage both to achieve your credit detox targets!
You need to detox your portfolio (reach a score of at least 500) within a limited time (~5min), or otherwise you will face rejection by your colleagues and the wrath of the regulators!
Good luck Furious Banker, show the world what you can achieve.
FuriousBanker is Copyright: Open Risk, 2014-2020, All Rights Reserved