New IFRS requirements for documentation and transparency make manual and siloed hedge accounting and valuation processes impractical. Given market volatility, hedge accounting must be a fully automated process.

Emerging regulations, such as The Dodd-Frank Wall Street Reform and Consumer Protection Act in the United States, Basel III and ! the adoption of standards defined in IFRS, mandate tighter alignment between the controller, treasury and risk operations.

As part of the Oracle Financial Services Analytical Applications suite that shares a common account-level relational data model and applicat! ion architecture, Oracle Financial Services Hedge Management and IFRS Valuations facilitates such alignment.

Oracle Financial Services Hedge Management and IFRS Valuations helps financial institutions:

Address regulatory requirements for IFRS, by classifying and computing the fair valuation of financial instruments, calculating effective interest rate, and computing and monitoring the effectiveness of hedging relationships;

Create and tune hedging strategies for optimal capital utilization. Financial services institutions are able to monitor retrospective hedge effectiveness, apply what-if and stress scenarios to test prospective hedge effectiveness and readily handle hedge de-recognition processes; and

Leverage a common computation engine for consistent valuations between treasury and accounting, and utilize common data quality and reconciliation processes across finance and risk applications.

"Driven largely by competition, market economics and performance pressures -- and the need to continually innovate and reduce IT complexity-- there's a growing need to modernize core finance platforms with solutions that integrate the disciplines of financial and performance management, risk and compliance reporting. For the regulators and regulated firms, this produces more accurate, risk-aware valuations. Institutions can have these capabilities today and use this degree of straight-through integration to better compete in the market, while at the same time positioning for upcoming financial accounting and reporting changes," said Michael Versace, director global risk, IDC, Financial Insights.

"In an era of increased regulatory requirements and rapidly fluctuating market conditions, financial institutions need to provide accurate valuations more quickly than ever and take a proactive approach to their hedging strategies. Oracle Hedge Management and IFRS Valuations enables banks to efficiently manage hedging relationships for optimal capital utilization. As part of the Oracle Financial Services Analytical Applications suite, the product helps institutions better reflect risk management activities in financial statements, as increasingly required by regulatory requirements," said S. Ramakrishnan, group vice president and general manager, Oracle Financial Services Analytical Applications.