In response to the crisis that is unfolding in the global financial markets, Aleri Inc., a leading provider of enterprise-class complex event processing (CEP) technology, today announced the development of a new module for its award winning Liquidity Management System.
The module, called the Liquidity Operational Risk Analysis Module (LORAM), is designed to offer banks an enterprise-wide, real-time measure of liquidity exposure and liquidity ratio. Additionally, LORAM provides a flexible liquidity stress testing environment that enables banks to model stress events and gain insight into how different scenarios impact the bank's liquidity exposure and assets value allowing them to better manage liquidity risk.
"Due 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," said Ralph Silva, European Research Director with the Tower Group. "Aleri's approach to stress testing is a promising solution within this environment."
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 bank's 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 Aleri's LMS product with the new LORAM module.
"We ran a prototype over several months in the wake of the August 2007 credit crunch and had successfully proven that Aleri's 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," said Don DeLeLoach, 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.