(17 Mar 2015) Risk Edge Solutions today announced commercial availability of its Credit Risk Module. The module is the latest addition in its offerings in Risk Management Domain – along with Market Risk, Operational Risk and Instrument Pricing.
The latest module provides critical counterparty default / credit risk measures such as Potential Future Exposure (PFE), Expected Exposure (EE) etc. Users of this module will be able to measure, predict and manage Counterparty defaults to a significant extent.
Mr. Nitin Gupta, CEO of Risk Edge Solutions said, “Its a great feeling to know that we have designed a unique and sophisticated solution for Energy and Commodity Companies. Today, most companies measure Counterparty Default or Credit Risk by measuring Accounts receivables (net or gross), Credit deposits or some such hindsight measure. Further, seeing these “risks” spread across different forward months gives them an idea about future Cash flows, but not about future risks – a fact well-understood and acknowledged by Risk Managers in these companies. Measuring counterparty default risk is only possible if you apply stress scenarios to various curves far into the future – something that our Credit Risk Module does well !”
The Module boasts of cutting-edge algorithms which not only project prices far into the future but also take correlations across various assets in the portfolio. This results in far more accurate picture of default risks when compared with projecting asset prices individually.
Mr. Gupta further added, “We used Monte-Carlo Simulations in this module, which is by far the most computationally intensive method. Due to this, the system churned over 10 billion numbers with each batch upload of positions. One of the biggest challenges for us was to get the best performance out of the system, so we developed the code using parallel processing techniques which gave us substantial savings in time. Calculations that took hours earlier, were done in a few minutes !”
About Risk Edge Solutions:
Risk Edge provides Commodity Risk Management Solutions. Its Flagship Software Product, RiskEdge, is a world-class Integrated Risk Analytics Platform that meets all Risk Management related requirements for commodity companies. RiskEdge can accommodate unique commodity business processes with ease, is really Easy-to-Use because of its web-interface and is priced well within the budget for most companies. Risk Edge is based in Hyderabad, India, and has presence in 6 countries. Risk Edge team has prior experience in implementing Risk Solutions for several global, large commodity players, many of whom are part of Forbes’ Global 2000 companies list.