From the November 2008 issue of Treasury & Risk magazine

Bronze AHA Award Winner in Credit Risk Management

At General Electric Co., matching interest rate and foreign currency trade data with its thousands of counterparties around the world was stymied by the lack of an international standard for recognizing and capturing trades, not to mention the poor and often inconsistent data received from the counterparties.

As GE's book of assets grew, so did its book of complex derivatives. It soon became apparent--and imperative--that a system was needed to put trades and marks with counterparties in agreement. "We were getting marks in from counterparties on Excel worksheets that made no rhyme or reason," says Dennis Sweeney, deputy treasurer at Stamford, Conn.-based General Electric.

In 2005, GE's credit risk management team worked with counterparties to develop a standard template for populating trade data containing all key fields required to reconcile trades, such as notional amounts, maturity dates and entity name. The team then internally redesigned a cash reconciliation software tool called Frontier to match trade data, providing the first automated importing and reconciliation of GE and its counterparties' trade data.

Among the benefits is improved efficiency. "A process that used to take three to four weeks now takes a week to 10 days max," Sweeney says. "And when data doesn't match up materially, a report is sent out immediately to direct an investigation. We're in a position to quickly determine if we incorrectly inputted a trade parameter, used a wrong curve or made an incorrect calculation. This has been a great success."


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