Republic National Bank Deploys Algorithmics'
RiskWatch 3.1 Globally
ACTION ITEMS
Algorithmics Incorporated, a leading provider of innovative enterprise-wide financial risk management software, has announced that RiskWatch 3.1 will be deployed globally at Republic National Bank (RNB), a wholly owned subsidiary of Republic New York Corporation with assets in excess of $50 billion. RNB, a full service commercial bank, cited the key benefits of Algorithmics' software as having the ability to model complex portfolios across all assets as part of an accurate, integrated approach to credit and market risk management -- enabling more effective allocation of capital.
RiskWatch allows RNB to build upon their immense success with the modeling of off-balance sheet risks from trading activities, by providing a complete set of methodologies to measure risk and simulate exposures across the entire balance sheet, including mortgage backed securities, asset-backed securities and bonds.
Using multi-step Monte Carlo simulation techniques, RiskWatch will measure RNB's enterprise-wide credit exposure by stress testing market factors and monitoring credit limits. Credit migration and default probabilities will then be incorporated to calculate expected and unexpected losses.
"Having successfully implemented RiskWatch in our New York office, we were looking for ways to enhance our ability to manage our total risk exposure, " said Ariel Salama, Managing Director and head of Risk Management for RNB. "RiskWatch 3.1 allows us to model the credit and market risk of complex instruments in an integrated fashion across the Bank's entire portfolio. By doing so, we can take into account the effects of offsetting market moves and the marginal contribution to risk on a global basis, which in turn, allows us to manage capital more efficiently."
"We are working with Algorithmics to provide access to the RiskWatch platform based upon our New York installation, to the trading and risk managers in all of RNB's major trading centers," said Gideon Pell, RNB's head of portfolio risk management. We are also looking at suitable technologies to integrate the RiskWatch enterprise-wide risk process with RNB's global trading and securities operations, so that the management of exposures, limits and capital usage is driven by a common data source and analytical engine."
"While regulatory pressures are a fact of life in today's banking climate, RNB's forward-looking view of risk gives them a tremendous competitive advantage," said Dr. Ron S. Dembo, president and chief executive officer of Algorithmics. "By managing risk across the enterprise, RNB will be able to make more informed decisions and free up capital reserves."
Over the next year, RNB plans to expand the global roll out of Algorithmics' software to include their Monaco and Luxembourg offices, thus assuring RNB customers that their credit and market risk will be effectively managed on both a local and global basis.
About Republic National Bank
Republic is a money center bank with branches and subsidiaries throughout the world. The principal subsidiary of Republic New York Corporation, Republic National Bank is a full service commercial bank with 83 branches in the greater New York metropolitan area; 8 branches in Florida and 3 branches in California. Republic ranked 17 among US banks in deposits as of December 31, 1998.
About Algorithmics
Since 1989, Algorithmics Incorporated has set industry standards in the development of enterprise-wide financial risk management software. The synergy of our market-leading software, experienced personnel and proven implementation approach ensures that financial institutions proactively manage risk and allocate capital more efficiently. Headquartered in Toronto, with offices in New York, London, Frankfurt, Tokyo, Madrid, Paris, Singapore, Mexico City, Rio de Janeiro, Sao Paulo, Johannesburg, Vienna, Sydney and Bridgetown, Algorithmics serves more than 75 financial institutions and corporations around the world.