MIT (Micro Informatique & Technologies SA), Lausanne announces that it has developped a specific Basel II & III module within its latest system TRAC Trade Risk Active Control.
TRAC is a Risk and Collateral Management application destined for Trade Commodity Finance Relationship Managers, Credit Risk Managers, and Top Managers who want to track and monitor their risks appropriately. The purpose of the software is to replace the Excel worksheet widely used in the Trade Commodity Finance sector. The new system can support both transactional commodity finance and structured trade finance activities.
Paul Cohen Dumani, MIT’s General Manager, comments: “Basel II has already set strict guidelines for Trade Finance in terms of Capital requirements to finance Trade. There will be even more constraints with Basel III. Therefore, a Collateral Management system for Trade Finance needs to give a clear view to Trade Finance managers of the necessary capital required for this activity at any given time, and also where savings could be made to allocate more financing to increasingly demanding Customers”.
TRAC enables the follow up of Collaterals with an evaluation on a mark to market basis, which is already a prerequisite for Basel II. It also enables to create specific statistics for Basel II and III calculations. The Basel module also enables to calculate the amount of capital
required in the frame of Basel II requirements; it takes account of notions such as “Probability of Default (PD)”, “Loss Given Default (LGD)” and “Exposure at Default (EA)”. Furthermore, the system handles features such as Hedge, stock financing, as well as Counterparty, Country, and Commodity limits that are paramount notions for monitoring Trade risks in the frame of Basel II and III guidelines.
