Bayer AG (Bayer), a global enterprise with core competencies in the fields of health care, agriculture and high-tech materials, has gone live with SunGard’s Adaptiv solutions for risk management. Adaptiv Analytics, Adaptiv 360, Adaptiv Operations will help Bayer to conduct fast Monte Carlo-based calculations of risk measures such as value at risk (VaR), potential future exposure (PFE), credit valuation adjustment (CVA), and debt valuation adjustment (DVA) to support the firm’s global financial risk management, treasury operations from trading to hedge accounting, and adherence to the International Financial Reporting Standards (IFRS) 13 rules.
To help maintain a competitive advantage, organizations are looking to adopt simulation-based methodologies to help improve how they measure and manage risks associated with OTC trading and traditional financial activities. SunGard’s Adaptiv Analytics helps organizations like Bayer to calculate accurate counterparty exposure and CVA and similar measures to the single financial instrument’s position level, helping support the fair value accounting mandates required by IFRS 13.
Alexander Burck, head of corporate financial controlling at Bayer, said, “To help mitigate risks, Bayer decided to utilize the same risk management methodologies used by some of the largest and most advanced global banks. SunGard’s Adaptiv Analytics, Adaptiv 360 and Adaptiv Operations enable Bayer to determine, monitor and steer our counterparty risk accurately and consistently across our counterparties. With the automated Adaptiv Analytics solution in particular, we are now able to calculate Monte Carlo-based CVA and DVA and attribute the results accurately to the trade level, even within netting sets, helping us to comply with regulations such as IFRS 13.”
Juerg Hunziker, president, trading and risk, SunGard’s capital markets business, said, “With SunGard’s Adaptiv, Bayer can focus on utilizing advanced risk management and calculation methodologies to help mitigate risk and comply with the latest regulatory requirements. Quickly and accurately calculating risk measures such as CVA, DVA, PFE and VaR across an enterprise will help firms to be well-positioned to gain a competitive advantage in industries where new regulations like IFRS 13 demand new or improved approaches to managing risk.”
