A press release said the integration of BarraOne’s global, multi-asset class portfolio risk service with Northern Trust’s custody, accounting, fund administration and collateral management platform provides a view of risk and compliance information for clients including investment managers, pension funds, insurance companies, family offices and other asset owners. Utilizing Northern Trust’s single, integrated risk portal, clients can apply the full spectrum of risk models and stress testing to generate predictive risk reports that can be used to adjust strategies, maintain investment policy compliance or meet regulatory requirements.
According to the announcement, examples of predictive risk functionality for different types of users include:
- Scenario-based analysis including interest rate shocks and credit risk shocks to help insurance companies comply with increased reporting required by the “Solvency II” regime, which forces insurers to set capital requirements more in line with their risks.
- Overnight reporting on derivatives market and counterparty risk, for Investment Operations Outsourcing clients.
- Enterprise-wide risk reporting for financial institutions subject to a range of regulatory measures coming into effect across the globe, including UCITS IV and Dutch Financial Assessment Framework (FTK) in Europe, Dodd-Frank in the U.S. and FSR 107 sensitivity reporting in Asia.
“Using these state-of-the-art tools, we can forecast risk over short and long horizons, assess risk from various sources, stress-test investments and better prepare diversification analyses across multi-asset class portfolios,” said Jim Trotter, Global Head of Investment Risk & Analytical Services at Northern Trust, in the announcement.