Economic Capital Solution

By: Markit  09-12-2011
Keywords: Risk Management, financial institutions

At QuIC, we keep a close eye on your bottom line. What’s more, we keep a close eye on the market. In fact, we pay keen attention to market fluctuations and innovations that occur in the industry to ensure that our solutions maintain a standard of excellence. This is what makes us market leaders. It’s also the reason why the world’s most successful financial institutions rely on us to provide them with an effective risk management infrastructure.

The value of our solutions adds up. The QuIC Component Suite™ supplies the building blocks that are needed to create all of our solutions. Our components are the reason that QuIC’s solutions have such impressive power, speed and reliability, all on a flexible framework. It is these qualities that will provide you with the competitive advantage.

QuIC’s Economic Capital Solution

We provide you with a system that protects against extreme circumstances.

The 2008 credit crisis highlighted the fact that many financial institutions were ill equipped to measure the true value of their portfolio across all asset classes. This challenge was, in part, due to inefficient and inaccurate risk-based capital measures, such as information and business ‘silos’. Fortunately QuIC’s Economic Capital Solution enables you to better capture extreme stress events by cutting down the time it takes to run sufficient simulations.

This solution gives you access to accurate, up-to-date and granular information concerning your capital requirements. This helps you to determine your business strategy across different assets and to enable adequate forward-looking capital projections under a range of scenarios. It also allows you to optimise and manage your economic and regulatory capital requirements.

Now you can perform data aggregation with flexible hierarchies for risk calculation results. These include marginal and incremental risk measures, such as expected shortfalls. It also allows you to drill down to scenario and transactional levels.

Scalable, innovative and fast

View your Economic Capital in its true light with our solution.

We know that there is no room in this industry for a ‘one size fits all approach’. That’s why it’s easy to make enhancements to QuIC’s Economic Capital Solution. This is in comparison with the ‘black box’ approach that many technology suppliers offer. We have designed this solution so that it can integrate with other down-stream applications. By doing so, it effectively extends the life of your existing market and credit risk applications.

The backbone of this solution is our QuIC Simulation Framework™. It allows you to breakdown portfolio calculations into sub-jobs. It also performs automated load balancing to maximise hardware utilisation, without sacrificing performance. In this way, nodes on a distributed system can be optimally used.

We know how valuable your time is. We can help you to spend it wisely. How? QuIC’s Economic Capital Solution typically reduces the time taken to calculate economic and regulatory capital from days to hours. This is because the solution relies on the extremely fast QuIC Engine™ to supply the power behind all of its computation. A 10-fold speed increase is normal and a 100-fold increase is common, allowing for intra-day simulations to be performed with ease.

  • AVOID INACCURATE ECONOMIC CAPITAL ESTIMATES
    Cover most asset classes and instruments in a single framework, thereby reducing the need to rely on rough estimates for unknown portfolio risks.
  • BETTER UNDERSTAND YOUR BUSINESS
    Gain an overall view of both your economic and your regulatory capital requirements to benefit from a more complete and granular risk analysis.
  • CAPTURE ALL RISK DATA
    Perform calculations using transparent risk simulation models that can be run reliably within a time frame that is not excessive.
  • AVOID THE ‘BLACK BOX’ APPROACH
    Choose a solution that reflects the true economics of your portfolio, across all asset classes, enabling you to better capture extreme stress events.
  • MINIMISE TECHNOLOGY COSTS
    Employ fewer, lower-cost processors.
  • EXTEND YOUR EXISTING ARCHITECTURE
    Adopt solutions to work alongside existing infrastructure.

Keywords: financial institutions, Risk Management

Other products and services from Markit

09-12-2011

IRC Solution

We also take pride in our clients, particularly since the world’s leading financial institutions trust us to facilitate their risk management needs each and every day. As regulatory guidelines evolve over the coming years, risk management professionals need to be able to modify their IRC models quickly and constantly.


09-12-2011

Pricing And Valuation Solution

QuIC’s Pricing and Valuation Solution has the speed, ease of use and flexibility to deliver accurate pricing and hedging calculations in far less time than the industry standard. Designed and implemented to satisfy your specific requirements, our solutions provide the ability and confidence to move ahead of the competition.


09-12-2011

Market Risk Solution

Accuracy is never sacrificed for computational speed: the QuIC Engine™ can run market VaR and credit PFE calculations on large global portfolios of complex instruments in a fraction of the time required by competitive risk-management systems.


09-12-2011

CVA Portfolio Management Solution

Professionals involved in trading and risk management can easily run a full range of simulation and pricing models to capture either market-implied or historical parameters. This solution has been designed to deliver flexible, near real-time pricing, expected future exposure and incremental expected future exposure of large complex portfolios.


09-12-2011

Banking

By processing vast amounts of complex data using fast, reliable calculations and simulations, our solutions change the game of risk management for the world's leading financial institutions. By integrating our highly advanced components, we provide you with solutions that empower you to stay ahead of the market and ahead of your competition.


09-12-2011

QuIC Services

That’s why we offer a range of services designed to provide you with comprehensive support, when and where you need it. It extends to our internal and external model validation, offering you across-the-board confidence in your new system. It continues with our flexible training programmes to suit all levels of technical ability. We want our solutions to provide you with the maximum benefit. Our commitment to you extends beyond our technology.


09-12-2011

Counterparty Credit Risk Solution

That’s because our solutions cover the full range of credit risk requirements, ranging from pre-deal and post-deal credit oversight and regulatory capital to dynamic counterparty credit exposure hedging and Economic Capital. This allows QuIC clients to remove the need for conservative risk estimations and has improved the alignment of their front office and credit risk departments.