Bloomberg’s derivatives library helps institutional investors trade and risk manage structured product investments
February 19, 2020: Bloomberg’s Derivatives Library (DLIB) has been selected by Santander Corporate & Investment Banking (Santander CIB) to provide its institutional clients with an automated way to model bespoke structured products, and calculate tradeable prices.
DLIB facilitates the workflow between sell and buy-side firms by allowing them to understand, trade and risk manage structured products, all in one solution. By integrating its quoting engine with DLIB via our model API, Santander CIB allows its clients to access real-time tradeable prices on the bank’s dealer page on the Bloomberg Terminal. In addition, DLIB provides both Santander CIB and the buy-side counterparty with clarity into deal characteristics, as well as back-testing and product life-cycle management capabilities.
Alfredo Madrigal, European Head of Equity Derivatives & ETDs at Santander CIB, said: “This agreement with Bloomberg is key within our strategy to balance (mainly through digitalization) our position on the structured products market with the bank’s position in the euro area by capitalization, taking advantage of our range of vehicles (including Sustainable Bond issuer), good rating and specialization on European and Latam underlying, everything carried out under our commitment to responsible banking.”
Karim Faraj, Global Head of Front Office Derivatives at Bloomberg, said: “We are pleased that Santander CIB has chosen to use DLIB to structure deals and provide prices to its clients in real-time. Sell- side firms are increasingly looking for ways to extend the reach of their distribution channels for structured products. By adopting DLIB to calculate and distribute prices, banks are able to service their clients faster and more efficiently, and buy-side firms also benefit from improved decision-making and risk management capabilities.”
Bloomberg offers an integrated, cross-asset solution for structured products including underlying data, pricing, risk management and reporting tools. In 2019, the company won the Risk Markets Technology Award for “Pricing and analytics: structured products and cross-asset” and the Chartis RiskTech100 Award for “Pricing & Analytics – Fixed Income” and “Pricing & Analytics – Multi-asset”. According to the judges for the Risk Award: “The extensive integrated end-to-end framework for structured product and cross-asset pricing, with a choice of proprietary Bloomberg applications or in-house add-ons, make this a powerful tool.” Additionally, Bloomberg won the Waters Technology Award for Best Sell-Side Front-Office Platform in 2019, as well as several awards from Structured Retail Products in technology, pricing and risk categories.
DLIB allows firms to create structured products quickly and easily – whether single, cross-asset, baskets or hybrids – by providing access to pre-existing and custom templates. It allows users to model theoretical pricing, on an individual and a portfolio basis, and analyse the risk of deals, including exotic and hybrid payoffs.
DLIB is integrated with Bloomberg’s suite of Enterprise Products such as TOMS, a sell-side order management system, AIM, a buy-side order management system, and MARS, Bloomberg’s Multi Asset Risk System, to streamline the workflows from pre-trade to post-trade, front to back. Please find more information about Bloomberg MARS here, or type RISK <GO> on the Bloomberg Terminal.