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Banco BBA and Ascent Financial Technologies Customize FEA Analytics for Brazilian Financial Markets

March 14, 2002 — Berkeley, Calif. USA and São Paulo, Brazil

Financial Engineering Associates, Inc. (FEA) announced today that FEA Partner Ascent Financial Technologies and Banco BBA have completed the first customization of FEA value-at-risk (VaR) technology for the Brazilian financial markets. Ascent now offers FEA’s VaR software programs with direct support for major Brazilian financial instruments.

Ascent built its customized FEA VaR system, including MakeVC®, VaRworks® and VarlibÔ, in close cooperation with Banco BBA Creditanstalt S.A. (BBA), the largest independent wholesale bank in Brazil

"The main objectives of our work at BBA were to integrate FEA’s Varlib with the firm’s other systems, and to satisfy BBA´s need for a VaR analysis tool that incorporates market risk factors specific to Brazil," Ascent Financial Technologies CEO Alberto Suen said. "BBA chose the FEA value-at-risk software solution precisely because the FEA technology is at the frontier of the Risk Management field. Also, BBA was attracted by the power and flexibility of the FEA VaR system, and the fact that it is the only system licensed to use the VaRdelta® patent."

Enio Bonafé Mendonça de Souza, Director of Risk Management at BBA and one of the most experienced professionals in risk management in Brazil, said: "With the FEA VaRdelta technology BBA traders can rapidly choose candidate operations that optimize our hedging strategies by fully exposing the VaR and cashflow impacts of any transaction. The FEA VaR system gives us very fast performance; It allows intra-day VaR estimates, robust stress testing, and multiple reporting options."

Suen adds that Ascent’s customized FEA VaR system will deliver a competitive advantage to Brazil-based banking organizations. "In 2002, Brazil’s new national clearing system, the Brazilian Payment System, will require banks to inform the Central Bank of their cash position and transactions electronically. Firms using Ascent’s FEA VaR solution will have a fully integrated risk management system that supports and simplifies their new on-line reporting requirements."

FEA President and Chief Scientist, Dr. Mark Garman applauds Ascent’s and Banco BBA´s work with the FEA VaR technologies. "The FEA Partner program is designed to benefit companies like Ascent. Using FEA software technology, Ascent has developed a valuable product that gains strength and credibility from its foundation in FEA’s proven risk management methodologies."