Valuation separation
Independent valuation is an increasingly important requirement for verifying trading activities and banks' portfolios, especially in the wake of the credit crunch and tougher regulations. As banks continue to seek valuation and pricing capabilities from third-party systems in addition to honing their own models, standardising analytics and libraries remains a challenge. Emma Dunkley reports
At the end of May, Carnegie Investment Bank partnered with SuperDerivatives, a provider of multi-asset front-office systems, to deliver an independent valuation service for the bank's equity derivatives portfolio. The move by Carnegie to select an external validation company was necessitated by events in early 2007, when traders at the bank manipulated valuations of trading positions, inducing a warning from the UK Financial Services Authority (FSA). In order to preclude any further manipulation
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