âDue to the current situation, liquidity management has moved away from a nice to have to the level of necessary utility status, as important as the electricity for running your business,â said Ralph Silva, European Research Director with the Tower Group. âAleriâs approach to stress testing is a promising solution within this environment.â
LORAM, a natural extension of the Aleri LMS product suite, leverages the cash and collateral stocks and flows information already consolidated across the bank within the existing LMS modules. Aleri believes that the current credit crisis has made clear the need to complement the bankâs ALM infrastructure which was design for long term structural management of liquidity based on balance sheet information, with a short-medium term operational contingent management of the liquidity risk based upon on stock and flow model such as that provided by Aleriâs LMS product with the new LORAM module.
âWe ran a prototype over several months in the wake of the August 2007 credit crunch and had successfully proven that Aleriâs LMS offering could provide the ideal basis for managing operational liquidity risk in an extremely compelling way, but we made the decision to accelerate our plans to bring the new LORAM module to market given the current crisis. Once again, interbank lending has stopped, we are seeing bank runs, and all of this is dramatically re-enforcing the need for timely and comprehensive liquidity information in order to take appropriate action under these conditions,â said Don DeLoach, President & CEO of Aleri.
Aleri is working with customers to deliver LORAM in beta version next quarter, with general availability targeted in Q1 of 2009.