RevalÂ®, a global leader in financial risk management solutions and services, is delighted to announce that the Commerzbank AG, one of Europeâs leading financial institutions, has selected Revalâs HedgeRxÂ® solution.
Commerzbank selected Reval after a thorough review of several systems vendors and determined that HedgeRx was the best in the industry. HedgeRx will be deployed as a global application via the Internet for Commerzbankâs derivative desks in Frankfurt, London and New York. In addition to being able to leverage the analytics and independent valuations from HedgeRx, Commerzbank will be using it to support an increase in client demand to analyze pre-trade hedge effectiveness largely as a result of the impact of IAS 39.
Under IAS 39, derivatives are now on balance sheet and marked to market changes are recorded every period. In order to minimize P&L volatility, derivative users are finding the requirements to achieve hedge accounting challenging in terms of both the documentation and effectiveness requirements.
Thomas Deppe, Global Head of Corporate Risk Advisory at Commerzbank Corporates & Markets (CBCM), said: âListed companies, now required to report in accordance with International Financial Reporting Standards, are finding the process of complying with IAS 39, in particular the requirements to qualify for beneficial hedge accounting treatment, onerous, expensive and time consuming. In some cases, these reporting requirements have already reduced the use of derivatives as a risk management tool. Commerzbank has chosen to include HedgeRx as part of a comprehensive service enabling us to support our clients in the hedge designation, documentation and effectiveness testing process. We believe that this will help to create real value for our corporate customers in establishing best practices for enterprise risk management.â
âWe very pleased to be working with Commerzbank and look forward to a long term partnershipâ said Peter Reynolds, Director of European Sales of Reval. âThe complicated hedge accounting standards both here in Europe and in the US have meant that banks need to adapt to the ever growing needs of the corporations that hedge.â