ecofinance Finanzsoftware & Consulting, a treasury management software provider, has released ITS 10.0.0, with an added conditional value-at-risk (cVaR) function. The release also provides a function for evaluating counterparty risks (default risk), offering absolute and relative tolerance values for effectiveness tests, which means that smaller changes in value can be managed more effectively. Besides ongoing modifications of EBICS, new import possibilities and test routines further improve the handling of payment transactions.
From Payment Factory to Test Routines
Based on the characteristics of a payment and via rules for payment formats, an optimised payment format and the cases in which this format is required are automatically detected in the payment factory, after a first registration of the user. A large number of search and filter criteria are used by the system, for automatically suggesting an optimised format that provides the most cost-effective payment transaction.
A new function, which checks duplicate submissions, provides state-of-the-art error prevention, something that is particularly necessary for bulk payments traffic. All payments are checked for duplicates by this function, and the user receives an e-mail message or alert notification in the event of a duplicate payment. At the same time, the continuous process documentation guarantees an absolutely secure audit trail.
Test routines are also used by the system for automatically checking BIC and IBAN numbers. The import of the BICPlusIBAN directory also makes this function very comfortable for users. Additional directories (BLZ Directory and SEPA-Clearer Directory of the German Federal Bank) can be imported for facilitating payments traffic throughout Germany, helping to monitor payment details with appropriate test routines.
ITS tools have already been available for preparing simulations, scenario analyses, limit administration and monitoring in the area of risk management. Hedge accounting, too, is supported, including effectiveness tests and the calculation of risk ratios. This includes value-at-risk or cashflow-at-risk calculations, for individual transactions or for individually defined portfolios. In the new release, the calculation of VaR also provides the cVaR, which corresponds to the expected loss when the VaR value is exceeded.
Release 10.0.0 also offers a calculation of the counterparty risk (default risk) with evaluations. This is measured by means of credit default swap (CDS) spreads, which represents a surcharge to a fair interest rate curve. CDS curves can be defined for companies, institutes and issuers. Different CDS spreads can be used for this evaluation, depending on the market value of the transaction.
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