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IT2 Version 7.0 – Navigating Uncertainty with Confidence

IT2 Treasury Solutions announces the release of version 7.0 of the IT2 treasury management system. Version 7.0 addresses the priority financial risk management issues stemming from the financial crisis, as well as offering enhancements to cash and liquidity management, and in technology.

A year has passed since the collapse of Lehman Brothers – which carried an S&P ‘A’ rating at the time of its failure. In reaction to the ensuing crisis, corporate treasurers have been radically re-thinking their counterparty risk management policies, and searching for techniques that would enable them to anticipate and avoid unacceptable exposures in the future. IT2 version 7.0 accordingly integrates a new range of sensitive, fast moving risk indicators for credit risk management and reporting. The new risk indicators are fully integrated with IT2’s limit management module, allowing for pre-trade warning and real time usage monitoring and email alerts based on a wide range of credit worthiness indicators (including CDS spreads, bond spreads, equity prices and equity ratios).

Heightened levels of counterparty uncertainty have created a further complex requirement for companies reporting under US GAAP: under FAS 157, they face the demanding tasks of calculating a qualitative value relating to non-performance risk, and of recording the adjusted value in their financial statements. IT2 version 7.0 offers the only integrated TMS solution for these very demanding FAS 157 requirements, involving a new fusion of credit risk management and advanced accounting techniques and disciplines. IT2 clients can now enjoy seamless compliance with FAS 157, without the need for interface management, or for the synchronization of key data with third party systems. IT2 7.0 fully supports credit adjusted fair value calculation. The credit valuation adjustment (CVA) may be derived from the credit default swap (CDS) spread curve, or directly from the counterparty’s probability of default.

Another change that has been catalyzed by the financial crisis is a renewed focus on locating and managing cash and working capital both within the organization and externally. Accordingly, version 7.0 incorporates new and enhanced cash and liquidity management features, which provide facilities to control, position and reconcile higher volumes of cash flows more efficiently, for both treasury and operating cash accounts. The reconciliation solution includes the ability to search much larger portions of bank transaction records when categorizing entries, combined with enhanced rule maintenance, automation and control.

IT2 7.0 features a number of automation and technology advances, including the use of the latest Microsoft charting technology to improve data visualization, and hence decision taking, across all instrument types (FX, debt, investment, commodities and derivatives), deal groups and analytical functions - across the system’s entire functionality spectrum. IT2 NET has been enhanced to take advantage of the next generation web technologies, to improve the system’s ease of use and interactivity. Performance and scalability enhancements upgrade the system’s capabilities in high volume treasury activities including cash forecasting and cash positioning operations.

Paul Higdon, IT2 Treasury Solutions’ Director of Product Management, adds: ‘IT2 7.0 has been structured and prioritized in response to clients’ requests, and to the rapidly changing demands of the treasury profession for integrated, dependable and functionally rich treasury management solutions. Uncertainty cannot, of course, be entirely eliminated in today’s financial world; but IT2 helps its clients by providing best practice support for navigating at the required speed and with the necessary precision through some of the most difficult and demanding areas for financial risk measurement and mitigation. IT2 clients can now take full advantage of the risk management lessons learned from the financial crisis, take control and manage their credit risk with confidence.’