Basis Point Group, LLC, leading investment operations performance consultants, announce the first operations performance index measure for the US Mortgage-backed Securities Markets. The publication of Basis Point Groupâs (BPG) groundbreaking new index in partnership with OpRisk & Compliance magazine provides firms a second major market measure to compare the quality and risk of their internal operations against an established standard of performance for the market segment in which they invest.
The US Mortgage-backed Securities Operations Performance (MBSOP) Index, to be published monthly, provides a quantitative ten-year measure of processing quality and risk for the GNMA, FNMA, and FHLMC securities markets. It is the second in a series of OPERA Indices created by Basis Point Group, who debuted its US Government Securities Operations Performance Index in OpRisk & Compliance magazine this April. The newest index, launched in the July Edition, extends market operations performance measurement to include this second major market segment, nearly doubling market coverage to $8.5 trillion.
The MBSOP index data is derived using Basis Point Groupâs patent-pending OPERAÂ® methodology in combination with information from the Federal Reserve Bank and the Securities Industry Financial Markets Association (SIFMA). The index tracks the Unrealized Riskâ¢ in the MBS market which varies from eight to eight hundred fifty basis points over the previous ten years. The index shows that deterioration in operations performance often happening in very short periods of time, but that reestablishing stability requires significantly longer periods.
âThese indices tie together the unseen market forces of other industry players,â explains BPG Partner Fred Sommers, âThey provide a better understanding of the ripple effect external circumstance can have on the quality and risk of internal operations and provide a base for extensive management analytics to assess risk based Efficiency, Internal Project Investment Trade-offs, Investment decision risk, and cross-process comparison.â
BPGâs proprietary method provides the only framework for operations performance measurement and attribution that allows comparison across markets, firms, and individual processes. It provides a powerful, targeted decision making approach to quantify operational improvements in specific components of processing while reducing overall risk. OPERAÂ® is the only operations performance approach that provides full transaction and event level attribution back to an individual organizationâs index of performance.
âBasis Point Group is actively working with leading edge firms to expand its firm level performance database,â says BPG Managing Partner Bob Fawls, âOur Unrealized Risk database will soon exceed two million events.â Firms interested in measuring and including their operations performance in this database are encouraged to contact BPG directly.