NEW YORK/CHICAGO, Feb. 26 /CNW/ - Algorithmics Incorporated, a worldwide leader in enterprise risk management solutions, today announced that it was working with Northern Trust Corporation of Chicago, Illinois, to implement and enhance Northern's enterprise-wide risk management engine to enhance credit analysis, reduce capital requirements and improve overall returns for this industry-leading supplier of personal, corporate and institutional banking services. The risk measurement and management functionality of Algo Market, Algo Credit and Algo Limits will form a core risk 'engine' for NTC that will support NTC in meeting key BIS II requirements for regulatory requirements and best practice risk management.
"The increasing emphasis by regulatory bodies for financial institutions to better calculate and manage capital prompted us to look at adopting a system that further integrates dynamic credit capabilities with traditional market risk measures," said Duane Rocheleau, Senior VP of Treasury for Northern Trust. "We believe that Algorithmics has the flexible, open framework, based on their Mark-to-Future methodology, to seamlessly and transparently integrate various risk management functions across the banking and trading books."
Peter Magrini, the Senior VP of Worldwide Technology at Northern Trust, added that, "The Mark-to-Future methodology should enable us to leverage a single architecture for credit and market risk management, for our middle- and front-office departments, which should enhance our day-to-day risk management decision activities, as well as the estimation of risk capital. Algo Market
and Algo Credit will provide a variety of accurate, updated calculations to
feed in to our BIS II-attuned risk engine."
Basel II is also stressing the need for institutions to implement comprehensive operational risk solutions that provide ongoing calculation and reporting of a firm's operational capital. Northern Trust's licensing of Algo OpRisk will allow the firm to leverage the same MtF framework and proven risk analytics components that power Algo Market, Algo Credit and Algo Limits, to provide integrated, transparent and ongoing operational risk oversight.
"A single architecture lends itself to a central risk engine that supports multiple business areas, and by implementing Algorithmics' products a central risk engine is enabled that will deliver both regulatory and economic capital relief to forward-looking firms, such as Northern Trust," said Michael Zerbs, Chief Operating Officer, Algorithmics.