Risk requires holistic approach

PC-based spreadsheets are no longer sufficient in today's complex financial world

A decade ago, spreadsheets based on mathematical models such as Black-Scholes and Monte Carlo were the height of sophistication in investment banks' risk management armoury. Yet as financial instruments have become much more complex and regulatory pressures require a more holistic approach to risk management across an investment bank, many firms still rely on desktop, PC-based Excel programmes to run their pricing and risk management activities.

Christophe Reech, director of UK-based Reech Capital, the risk management, pricing, valuation and operational services firm acquired by SunGard Trading and Risk Systems on June 2, says: "Spreadsheets were historically where banks could make a difference in their risk management and that is the reason most people are still using spreadsheets today."

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