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.

    Cover most asset classes and instruments in a single framework, thereby reducing the need to rely on rough estimates for unknown portfolio risks.
    Gain an overall view of both your economic and your regulatory capital requirements to benefit from a more complete and granular risk analysis.
    Perform calculations using transparent risk simulation models that can be run reliably within a time frame that is not excessive.
    Choose a solution that reflects the true economics of your portfolio, across all asset classes, enabling you to better capture extreme stress events.
    Employ fewer, lower-cost processors.
    Adopt solutions to work alongside existing infrastructure.

Keywords: financial institutions, Risk Management

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