Bank of America, Credit Suisse and Morgan Stanley have come together to develop a new online hub for buy and sell-side institutions participating in the corporate bank loan market
The Storm Loan Marketplace will use real-time agent bank data and an array of automated matching, settlement and reconciliation tools to bring greater transparency to new issue and secondary settlement in the par and distressed markets, say the partners. It promises integrated trade matching, primary and secondary trade settlement, inventory, position reconciliation, credit documentation and other critical activities.
Steve Ewald, principal, global markets group, Bank of America, says: "With the volatility we are presently experiencing in the markets and the threat of counterparty failure, certainty of settlement is crucial from a risk management perspective. The platform is a real solution that takes the loan market a long way towards accomplishing the goal of fast and certain settlement by automating what was previously an inefficient manual process."
The platform - developed using technology from Quartet Financial Systems and hosted by Xand Integration - is designed for use in the United States, London and other global markets and is expected to go live in early 2009, with additional functionality to be incorporated over time.
Howie Shams, managing director, fixed income department, Credit Suisse, says the introduction of an independent hub-based system opens up new possibilities for market participants. "It allows us to begin thinking seriously about the long-term benefits of such greater efficiency," he says. "Benefits that include prime brokerage capabilities for loans, repo for loan financing and even novel new strategies for loan borrowing and lending."