SunGard Trading and Risk Systems, an operating group of SunGard (NYSE: SDS), today announced that Dexia Group has selected SunGard’s Reech Analytics Library (REAL) for valuation of its complex derivatives and structured loans portfolios. Using Reech, Dexia Group will be able to provide effective portfolio valuation verification and improve risk control.
Dexia Group is the first local authority financing institution to subscribe to Reech REAL. REAL will help the group structure complex loans for local authorities and help give it a competitive advantage in this business. REAL can consistently and accurately value Dexia Group’s structured loans and OTC outstanding as well as help it to meet regulatory requirements, such as IAS 39.
REAL is a financial library that includes a comprehensive suite of proprietary models supporting a broad range of asset classes for pricing complex derivatives. It is integrated with Dexia Group’s trading and booking systems to provide homogenous valuations across the group’s various geographical locations (France, Belgium, Luxemburg) and businesses (local authorities finance, treasury, private banking). REAL is powered by Reech Automatic Derivatives Pricer (ADEP), a proprietary language that can describe any loan or OTC derivative, in plain English, from a simple vanilla swap or option to the most complex hybrid structure, and instantly provide the pricing and risk management parameters for the product.
Eric Hermann, global head of risk management at Dexia Group, said, "We selected Reech to help us to harmonize complex OTC valuation methodologies across our financing and trading operations, to meet regulatory requirements such as IFRS, and to enable us to increase our innovation capacity, bringing us a strong competitive advantage. Reech REAL provides fast pricing for a very broad range of asset classes, helping our traders and risk managers to better understand their risks, and trade or hedge accordingly. As a client of SunGard in other areas of the Group, we are confident in our ability to rely on SunGard as a long-term vendor partner."
Christophe Reech, president of SunGard’s Reech operating unit, said, "Dexia Group needed fast and flexible valuations for its complex instruments. Because Reech REAL is based on the ADEP language, complex structured products can be priced in a quick and flexible way. This completely changes the way banks can trade and structure OTC derivative products for their clients. Traditionally complex products could take days to price accurately, often resulting in a lost sales opportunity. With REAL, traders are no longer held back by the inability to accurately price complex deals quickly enough to secure a sales prospect."
Dexia Bank (part of Dexia Group) has been a client of SunGard’s since 1995. It also uses SunGard’s BancWare for integrated interest rate risk management of its global balance sheet.