London, UK (PRWEB) March 12, 2012
SunGard has extended its Adaptiv suite of solutions to help customers not only calculate Credit Valuation Adjustment (CVA) but also actively manage it. Adaptiv CVA Studio now helps traders hedge their CVA exposure, minimize their firm’s earnings volatility and understand the direct impact of CVA on their P&L.
Basel III’s CVA mandate will require banks to hold more capital for counterparty credit risk. This is expected to reduce the return on equity and therefore have a direct impact on the profitability of the over-the-counter business lines within many organizations, from global banks to regional franchise banks. Adaptiv CVA Studio helps traders dynamically hedge CVA volatility by offering the ability to calculate and view sensitivities, manage and hedge credit risk on their books, and calculate P&L and P&L Predict.
Adaptiv CVA Studio includes a Monte Carlo calculation engine for measuring risk and a trading-style interface to display counterparty and hedge positions in a single view of P&L and key risk metrics. The solution can run over one million valuations per second per processor core, helping customers achieve greater accuracy in their valuations by avoiding approximation techniques. Adaptiv CVA Studio can accurately calculate multiple risk measures on a CVA book to help manage volatility, including CVA, Debt Valuation Adjustment (DVA) and Funding Valuation Adjustment (FVA), sensitivities, stress scenarios, P&L attribution and P&L predict. Accurate CVA calculations help banks improve their selection of counterparties by helping them more precisely assess counterparty risk.
Juerg Hunziker, president of SunGard’s Front Arena and Adaptiv business units, said, “As the impact of Basel III on both profitability and earnings volatility is better understood, banks are establishing CVA functions to support compliance and improve how they manage P&L. Adaptiv CVA Studio can help by providing a complete view of CVA and transparency into credit risk using technology that can be quickly rolled out to traders and CVA managers across the organization.”
About SunGard’s Adaptiv
SunGard’s Adaptiv provides enterprise-wide credit and market risk management and operations solutions for financial services institutions. Adaptiv assists institutions of varying size and complexity to deploy technology to meet both internal and regulatory requirements for risk management and operational control. Adaptiv helps financial services institutions from the banking, hedge fund, asset management, insurance and corporate sectors with its deep understanding of risk management and operational processes. For more information, visit http://www.sungard.com/enterpriserisk.
SunGard is one of the world’s leading software and technology services companies. SunGard has more than 17,000 employees and serves approximately 25,000 customers in more than 70 countries. SunGard provides software and processing solutions for financial services, education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue of about $4.5 bilion, SunGard is the largest privately held software and services company and was ranked 434 on the Fortune 500 in 2011. Look for us wherever the mission is critical. For more information, please visit http://www.sungard.com.
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