Risk Newsflashes

BNG picks Front Arena for consolidating fixed-income and derivatives.

Bank Nederlandse Gemeenten (BNG) has gone live with the latest version of Front Arena to support the bank's interest-rate derivatives, money market and structured-loans activities, according to Front Capital Systems, an operating unit of SunGard. The shift will result in the bank replacing its legacy structured-loan system with a new back office.

BNG, a client of Front Capital since 1996, will also further consolidate its fixed income and related derivatives into one solution with complete straight-through processing support. Yield-curve calibration and improved support for historical valuation are additional risk enhancements it is gaining.

"We chose Front Capital Systems as a long-term technology supplier in order to reduce our dependence on maintenance of multiple trading-systems," states Hans Moerman, head of portfolio management at BNG.

----

IBM pitches tech package at $4 billion Basel II market.

IBM is introducing a package of software, hardware and consulting services to help banks and other financial institutions grapple with the information-management requirements of the Basel II Capital Accord.

IBM says its Risk and Compliance " Basel II Information Management Offering works with a company's existing technology-framework and enables banks to connect scattered data-repositories and make the right business information accessible on an automated basis.

The technology consists of IBM's Banking Data Warehouse, which can be used to build a database for Basel II purposes or a general-purpose data warehouse for understanding customers. It also includes DB2 Universal Database with built-in analytics for storing and analyzing information, and DB2 Information Integrator, which can provide a single view of data stored in disparate repositories across an enterprise, in real-time.

The Basel II Accords, which are recommendations from the Basel, Switzerland-based Bank of International Settlements' Basel Committee on Banking Supervision, are official guidelines that standardize measurements of credit risk, market risks and operational risk.

According to a December 11 report by Datamonitor, European banks will spend at estimated $4 billion software and services over the next two years to help them comply with Basel II.