Credit risk and interest rate risk are interlinked and must be modeled together. Kamakura’s solution to measure risks associated with asset & liability management, liquidity and interest rates is integrated with the full KRM product suite and provides focus on the managing the firm’s earnings, and ultimately the value of the firm.
Kamakura’s solution combines industry thought-leadership about options risk and generation of future interest rates with standard functionality for bread-and-butter financial planning and net income management and monitoring. Kamakura allows users to measure risk and return via more complex methods such as Earnings at Risk (EaR), along with traditional measures of earnings sensitivity analysis, GAP analysis, pro-forma financial statements, variance analysis, and ratio analysis.
Kamakura’s solution is particularly powerful because it properly accounts for the treatment of options, embedded options and derivatives, which were once considered a minor part of banking. This view has dramatically changed. Today, bankers recognize that options and derivatives are key; that managing them is a vital strategic issue.
Read more about Kamakura Risk Manager Net Income solution.