energycredit 2.1 now manages credit risk exposures for event-based oil trades. All physical commodities can be mapped using its unique exposure profile event mapping. The solution, which helps firms present a consolidated view of all exposures, captures deal data and uses specific rules to aggregate profiles where appropriate.
"With the price of oil continuing to rise and increasing numbers of banks entering this market, effective risk management for oil trading is ever more important," says Stephen Bruel, analyst from TowerGroup. "The ability to handle event-driven transactions and exposure profiles is increasingly crucial for credit risk management solutions to meet the demands of oil companies and multi-commodity trading houses."
energycredit 2.1, which is available through a web portal like its predecessor energycredit 2.0, provides a number of other significant enhancements, including:
--Simplified management of oil trading with a handling method for discrepancies including exception handling and alerts;
--Next generation advanced workflow, based on Microsoft's Workflow Foundation providing the capability to model complex business processes, linking external systems and events if required;
--Contingent risk allowing the calculation and reporting of secondary risk, separately from primary risk, vitally important in today's volatile credit market;
--The capturing of complex trade specific securities and the calculation of exposure mitigation effects;
--Pre-deal checker providing the ability to enter the notional or Potential Future Exposure (PFE) value of a potential trade and see it measured against a credit line;
--Event-based exposures allowing the modelling of exposure profiles based on specific dates on contracts to determine when risk is shifted to a given counterparty;
--The ability to define completely generic portfolios and assign specific limits to measure and monitor the exposure;
--Microsoft's latest Silverlight graphing capability, providing interactive web-based 3-D graphing and charting for visual representation of any reported data including exposure.
Eric Nelson, application architect at Microsoft UK commented: "Financial Objects is a prime example of how our partners can advance their solutions through our technology. Its use of Silverlight for animated graphing should prove both beneficial and easy to use for clients. Additionally, its use of our next-generation workflow module will provide users with the capability to model even the most complex business processes through their lifecycles."
More than 17 energy trading organisations, including Statoil, RWE, Calpine and TXU, are already benefiting from Financial Objects' energycredit solution. Existing customers which opt for the new release will be seamlessly upgraded to energycredit 2.1.
"Oil trading events and exposure levels are very different to those of gas and power, which is why this energycredit upgrade represents a milestone for Financial Objects," said Lee Campbell, director of product strategy at Financial Objects. "Working closely with Shell and Microsoft, we strived to add beneficial functionality to users through the most advanced technologies available, to deliver a global solution that genuinely empowers firms to manage and reduce their credit risk across their full commodity portfolio."