REUTERS/felix ordonez

KONDOR GLOBAL RISK

MARKET RISK

thoMson reUters recent MarKet recognition

nUMBer one risK technology ProVider 2009 & 2010 nUMBer one risK technology ProVider 2008, 2009 & 2010 Best Vendor for dealing technology Best trading systeM Vendor

MARKET RISK MANAGEMENT TODAYS CHALLENGES

financial institutions are seeking tools to improve transparency and to help manage their exposure to market risk more effectively. in the wake of the global financial crisis, market risk solutions need to address the following challenges:

GETTING THE RIGHT FIGuRES AT THE RIGHT TIME

Flexible reporting, with instant drill-down capability from the highest to the finest level of detail, at any time Economic capital calculation Instant simulation of the impact of new trades

SCALAbILITY AND OpENNESS

Managing rapid volume growth driven by scenarios and stress-testing as well as by business itself Quick, painless integration of new products, including exotics and hybrids

COST EFFICIENCY
Quick delivery and implementation More efficient use of existing skills and assets

traditional architectures relied on the replication of trades and valuation in the risk system. But in recent years this approach has proved to be too static and rigid to provide a satisfactory computation of enterprise-wide market risk. Building replication logic not only implies high development costs, because the type of data being replicated (trades) is so complex it also needs specialist staff dedicated to exception management and reconciliation tasks. and the constant addition of new instruments in the front office creates never-ending integration efforts Until now.

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KondoR GLoBAL RISK

KONDOR GLObAL RISK

Thomson Reuters Kondor Global Risk (KGR) is a powerful real-time credit and market risk system that allows risk managers to monitor risk across the enterprise. KGR Market Risk provides a comprehensive enterprise-wide solution for measuring and managing market risks across all banking activities. Understanding the impact of market changes on the balance sheet allows firms to make more informed business decisions and gain a competitive edge through managing market risk.

MANAGE MARKET RISK ACROSS ALL ACTIvITIES

Kondor Global Risk (KGR) aggregates market risks from multiple front-office systems and multiple pricing tools. its open architecture leverages existing pricing functions in the front office, eliminating pricing inconsistencies between the front/middle office and risk management systems. its open architecture makes it easy to add new products and enables users to compute a consolidated view of market risk as well as manage limits globally. Kgr ensures that as business grows, risk management capability will scale up proportionately without any duplication in development effort.

KEY bENEFITS AT A GLANCE

SPEEd
Accurate real-time measurement of enterprise market risk faster and easier implementation minimum reconciliation Short time-to-market for new products

EffIcIEncy
Coherence between front-office systems and risk management as they share the same pricing engine cost efficient workflow operation Flexible out-of-the-box regulatory reporting

RoBUSTnESS
scalable architecture offers the ability to manage year-on-year volume growth ability to cope with the growing complexity of scenarios and number of risk factors

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KondoR GLoBAL RISK

RELIAbLE ENTERpRISE-WIDE MARKET RISK

SCENARIO GENERATION Market data repository historical scenario generation based on stored historical data Monte Carlo-based scenario generation flexible scenario generation tool that offers the ability to set horizons and choose any risk factors

PRICING SIMULATION delegated pricing at front office level, orchestrated and controlled through KGRs graphical interface Pricing process, progress monitoring, and audit of all pricing inconsistencies or reported errors

RATE MANAGEMENT fill gaps, identify outliers and define proxies and adjustment factors, e.g. for corporate actions with time-series management features generate historical and stress test rate scenarios generated from historical data factors

KondoR GLoBAL RISK MARKET AnALyTIcS

REPORTING Var reporting tool consolidates all activity (Var per activity, per system, per geographical location any aggregation level) Var results are displayed by each risk class: ir, fx, equity, credit component Var, marginal Var, incremental Var calculations Var drill down from the scenario to risk factor causality for each aggregation level

BACK TESTING loading of action and no action P&ls from external sources, triggered from KGRs graphical interface Back-test reports daily view of the Var figures against the P&l numbers for any period of time (100 days, 250 days) graphical representation of backtest results

STRESS TESTING risk calculation for stress events flexible Market rates shift definition scenario generation to represent market events of the worst case scenario

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KondoR GLoBAL RISK

KGR: MASTER RISK

CONTROL ALL MARKET EFFECTS
Kondor global risk allows users to store and manage all the required figures for Var calculations. it provides all the required risk figures, from the individual risk factor values used in each simulation to the base (or horizon) portfolio value. Users can monitor the profit and loss distribution for any aggregation level (deal, country, industry, portfolio). Risk Factor drill-down can be employed to automatically isolate and independently calculate risks stemming from individual factor groups.

STRESS TESTING TAME EvENT RISK

in line with recent Basel ii guidelines concerning the revised framework for market risk, Kgr supports stress testing for better insight into potential impact of extreme scenarios. Using its flexible scenario generator, users can create all kind of scenarios (historical, stressed periods, stress-tests, Monte-Carlo). KGR can measure, analyze potential losses and clearly represent the impact of stress-test scenarios on any aggregation level.

FLExIbLE AND TRANSpARENT REpORTING

KGR reporting tool uses one-click slice and dice functionality for highly intuitive understanding and monitoring of market risk. it enables users to isolate all risk sources efficiently and compare market risk figures against previous results for the daily follow-up. The reporting tool also helps to ensure regulatory compliance for market risk.

DATA INTEGRATION
data quality is crucial for risk management, so Kgr leverages the thomson reuters enterprise Platform to offer a fully integrated enterprise risk solution. together these provide a powerful enterprise risk data and workflow platform that easily integrates with in-house data sources. Our solution efficiently orchestrates the loading, aggregation, cleansing and normalization of data from multiple sources used for risk computation.

Kondor Global Risk 5

REUTERS/ALESSIA PIERdoMEnIco

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KondoR GLoBAL RISK

KONDOR GLObAL RISK

THE SOLuTION TO FIT YOuR NEEDS

FAST
TIME TO MARKET
the thomson reuters solution brings new trades under market risk control dramatically faster than traditional software. our generic data model and distributed pricing architecture requires only lightweight data integration and allows for on the fly introduction of new products, including complex structures. Once the front office receives a sign-off, risk management does not need to go through the same lengthy process. new trades, even complex structured ones, can be mapped and are included in all Kondor global risk reports in a matter of minutes.

STRONG
OpTIMIZED FOR TRuE ENTERpRISE vOLuMES
our solution is designed to manage the vast volumes of data associated with enterprise risk data management. it addresses the problem of manipulating high volumes of data at speed. the solution can quickly load data and provides impressive report generation performance with the capacity to archive simulations. Kondor global risk also supports configurable aggregation and purge tasks to manage historical archives, increase the speed of intraday reporting and consolidate global reporting across the enterprise.

RATIONAL
COST EFFICIENT
operating multiple data sources, each with its own proprietary data models and semantics, is expensive. a new, holistic approach to data management improves efficiency and reduces costs. Kondor global risk is cost efficient both to implement and to run. in Kgr, the deal repository is in the front office, so there is no need for costly trade replication. save time on ongoing reconciliation and exception management between the front offices and risk management.

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KondoR GLoBAL RISK

THoMSon REUTERS REcEnT MARKET REcoGnITIon nUmbeR one RisK teCHnoLoGy PRovideR 2009 & 2010 RisK teCHnoLoGy RanKinGs 2010
number one overall Technology Vendor number one Trading Systems cross asset number one Trading Systems fx number one Pricing and Analytics inflation number one IAS compliance number one Pricing and Analytics fx number one Pricing and Analytics rates number one Risk Aggregation Market, credit, counterparty, liquidity, operational

nUmbeR one RisK teCHnoLoGy PRovideR 2008, 2009 & 2010 asia RisK teCHnoLoGy awaRds 2010
number one overall Technology Vendor number one Support Services implementation efficiency number one Trading Systems front-to-Back office foreign exchange number one Trading Systems front-to-Back office interest rates number one Risk Management Back office number one Risk Management credit risk Management number one Trading Systems front-to-Back office Hybrids/Cross-asset class number one derivatives Pricing and Risk Analytics interest rates number one derivatives Pricing and Risk Analytics Hybrid/Cross-asset class number one derivatives Pricing and Risk Analytics credit

best vendoR FoR deaLinG teCHnoLoGy FX weeK best banKs awaRds 2010

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AbOuT THOMSON REuTERS RISK MANAGEMENT thomson reuters is the largest provider of risk and trade management solutions globally, servicing over 700 financial institutions. our solutions offer sophisticated, tailored functionality at every step of the trade, from STP enabled front-to-back trading systems to enterprise wide risk management. We have the global reach and local expertise that is required of a long term strategic partner with more than 950 risk professionals worldwide. and with more than 20 years of experience, our customers can rely upon Thomson Reuters proven track record of delivering complex solutions to meet their exact requirements. for more information on thomson reuters risk Management solutions please take a look at financial.thomsonreuters.com/risk

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