How can RisQuant Power Nominals assist middle office and back office functions?

Middle office (risk management and IT) and back office (administration and accounting) functions are crippled by power market opacity. Regulators and management demand that positions be marked daily and that the company quantify the risks that the company faces each and every day. Typically, this is expressed as “value at risk” or similar measure. Of course, the preferred means would be to use actual traded values. However, term trading is sporadic in most regions and rarely reported. In the absence of market transparency, modeled values can be used to accomplish the same ends.

How does your organisation acquire the necessary data to drive risk control systems? Power Nominals facilitates the most important middle office daily task, acquiring reliable, consistent, external and transparent data to drive risk management systems.

• How much confidence do you have in the independence of the data driving your risk reports?
• How vulnerable is your trading book to 'gaming'?
• How thoroughly have your internal pricing models been backtested? How well has that backtesting been documented?
• Where do you get your volatility statistics?
• Would you be more confident with external sanity checks?
• Can Power Nominals assist in hedging decisions? Yes, it can prospectively assist measurement of the impact on value at risk (or similar measure) of hedging strategies or alternatives.