New offering allows clients to satisfy regulatory needs and industry best practice
LONDON, September 12, 2011 — BNY Mellon, the global leader in investment management and investment services, and Investor Analytics, a global leader in risk management solution, have today launched their money market stress testing service in the Europe, Middle East and Africa region.
The new service builds on BNY Mellon's strategic alliance with Investor Analytics and success in meeting regulatory demands on money market funds in the United States. It models the impact of interest rate shocks, credit risk shocks and liquidity risk shocks or any combination of these on the value of funds. Information is presented in high quality reports that easily identify the conditions that could lead to a depressed Net Asset Value (NAV) below an established threshold, an event commonly referred to as 'breaking the buck'.
Frank Froud, Head of Europe, Middle East & Africa for Asset Servicing at BNY Mellon, said: "As worries over the health of Eurozone countries, and indeed the United States, have spiralled in recent months, regulators throughout the world are increasingly demanding that money market funds undergo stress tests. However, more than simply meeting the regulatory requirement, stress testing has become an industry best practice, allowing fund directors and investors to easily understand the market conditions that can jeopardise their funds."
The suite of stress tests were developed by Investor Analytics and is available through BNY Mellon's sophisticated asset servicing technology platform. Benefiting from the integration and data management performed by BNY Mellon in supporting core services, these independent and objective tests examine changes in the fund NAV resulting from:
- Parallel and non-linear shifts in yield curves
- Changes in credit spreads
- Increasing redemption requests
- Combinations of the three above
Damian Handzy, chief executive officer of Investor Analytics, added: "The need for a solid risk framework and understanding of money market funds has only been reinforced by recent market turmoil. These stress tests allow clients of BNY Mellon to be alert to the dynamics of the markets and how this affects portfolios."
BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $26.3 trillion in assets under custody and administration and $1.3 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.7 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available at www.bnymellon.com and through Twitter @bnymellon.
Investor Analytics LLC, headquartered in Berkeley Heights, New Jersey, with offices in midtown Manhattan and London, has been providing portfolio and risk management services to the investment management industry since 1999. Investor Analytics employs proprietary methodologies to analyze complex investment portfolios of hedge funds and fund of hedge funds and provides clients with a suite of award-winning risk and transparency analyses.
This press release is issued by The Bank of New York Mellon to members of the financial press and media. All information and figures source BNY Mellon International unless otherwise stated as at June 30, 2011. The Bank of New York Mellon, London Branch, registered in England and Wales with FC005522 and BR000818. Branch office: One Canada Square, London E14 5AL. Authorised and regulated in the UK by the Financial Services Authority.