Case Study
Major European Central Bank
Consolidates Risk, Reserves
and Treasury Management
with Calypso
Central Bank
The Firm:
Central Bank in Europe with over $140B in reserves.
Background:
The central bank had concerns about the stability of their
incumbent treasury system, which started to show signs of
aging and lacked the innovation to keep up with the times.
The bank’s reliance on manual processes slowed its ability to
expand into new markets.
Increases in foreign reserves in recent years highlighted an
opportunity cost in the bank’s investment management
practices. The bank saw the potential to expand into higher
yielding instruments that complied with their investment
mandate, but was limited by their existing system’s inability to
price, trade capture and risk manage beyond vanilla treasury
products.
Poor integration between trading and operations led to
inefficient manual processes throughout the trade lifecycle.
Spreadsheets were created from the trading system, manually
adjusted, and then imported back into the legacy system,
making for a slow and unwieldy process. The bank needed a
major overhaul of its entire treasury and portfolio systems in
order to properly address these challenges.
BENEFITS SUMMARY
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Operational efficiency and control
Comprehensive reserve management
Complete financial instrument coverage
Robust, scalable, future-ready platform
Dedicated Professional Services team
Call to Action:
With the legacy system nearing the end of its serviceable life, the
bank set out to find a replacement which would resolve these
immediate issues:
Consolidate disparate trading, risk and reserve management
- This would enable a stable platform for real-time position
management and improve reaction to market shifts.
Modernize risk management capabilities - The bank was
seeking to improve and integrate pre-trade and post-trade
analytics for improved decision support.
Automate Workflows - Proliferation of spreadsheets and
manual systems had resulted in frequent breaks in operations.
The bank wanted to implement automated workflows that
ensured all transactions were processed in strict accordance
with their control policies.
Expand product coverage - Price, capture and process FX, fixed
income, repo, derivatives, and gold.
Minimize customization - The bank wanted a system that
could accommodate their needs using configurable off-the-shelf
functionality rather than extensive custom development.
www.calypso.com
Major European Central Bank Consolidates Risk, Reserves and Treasury Management with Calypso
Improved Market Operations - We provide full front-to-back
processing for all asset classes including:
• FX and money markets
• Fixed income
• Repo, reverse repo, sec lending
• Gold, including co-location deposits, operations and
inventory management
• Equities
• Derivatives
Real-Time Risk Management - Real-time risk management
capabilities allow different groups within the bank to see
critical information as soon as it is updated. Our out-of-the-box
analytics integrate with third party risk systems, providing the
bank with the coverage they needed.
Why Calypso
After reviewing several trading and treasury systems, the bank
selected Calypso because of its comprehensive functionality and
configurable architecture. Our solution addressed each of their
critical pain points with minimal customization, meaning it would
be easier to deploy initially and would remain more flexible over
time.
Calypso Solution
Calypso’s modern central banking solution enables the bank to
conduct monetary activities, manage reserves and control risks on
a single automated platform. The solution is configured to meet the
bank’s operational needs across a full range of functions including
trading, reserves management, risk management, and collateral
management.
Our solution yields a range of benefits, some addressing immediate
challenges and others providing long term value to the bank:
Automation and Control - The solution provides the bank with
improved operational efficiency and increased control. Using our
flexible workflow, we automate a wide range of bank-specific tasks,
including confirmations, payments, settlements, SWIFT messaging
and more.
Collateral Management - Our solution allows fully automated
collateral management across cleared, non-cleared, repo and
securities borrowing/lending activities. A central collateral pool
of cash, securities and precious metals supports all position
monitoring, exposure calculations, dispute management,
agreement management, advanced analytics, collateral
allocation and optimization.
Accounting - Calypso’s flexible accounting framework adapts
to local accounting rules and existing accounting systems,
incorporating regional standards such as ESCB accounting
guidelines in Europe.
Dedicated Professional Services - The Calypso Professional
Services project plan includes a dedicated, on-site team of
consultants and project managers from inception to go-live.
Our expertise combined with our understanding of the Bank’s
unique business requirements ensured a successful outcome.
Results
Once the implementation is complete, the bank will have
greater control, auditability, and automation of their
management of reserves – all on one platform.
Replacement of the legacy system will improve operational
efficiency while providing a foundation for more sophisticated
trading, portfolio management, and risk.
One-Touch Reserve Management - Our Portfolio Workstation
provides the bank with real-time reserve management that
supports both internal and third-party portfolios, delivering
superior visibility on a single, multi-asset platform. The Workstation
also allows them to conduct pre and post trade compliance
checks, performance measurement, benchmarking, and limits
management.
www.calypso.com
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