Hypo Bank has deployed RXM to provide on-line real-time risk management for money market, foreign exchange and derivatives in its trading rooms in Germany, the U.S., the U.K., Austria, Luxembourg and Hong Kong.According to a spokesperson, the bank is currently employing RXM to monitor and control approximately 22,000 trading transactions every month.

The spokesperson says that at some point Hypo Bank may expand its use of RXM to include mark-to-market valuation and netting. Hypo Bank is one of the five largest banks in Germany with a 1995 business volume of over 280 billion Deutsche marks. Founded in 1835, the bank has 650 branches in Germany, Europe, the U.S. and the Far East.

RXM provides real-time global exposure monitoring and risk management of trading activities using GEIS's private telecommunications network. The system's PC/Microsoft Windows-based front-end modules are connected via Hypo Bank's local area networks to GEIS's global network and the mainframe-based relational database system which underlies the RXM service. Mainframe hosts located in Amsterdam and Cleveland, Ohio function as RXM servers and centralised data repositories, says the spokesperson.

The GEIS spokesperson adds that the system was installed to meet Hypo Bank's specific exposure management needs and to integrate the bank's worldwide trading desks. This will help Hypo's dealers optimise credit lines and minimise potential losses while increasing trading volumes, the spokesperson adds.

RXM updates information on the bank's worldwide exposure "virtually 24 hours a day, seven days a week," says the spokesperson. This makes critical decision information available in real time to dealers and managers around the globe. RXM administers all bank and cross-border exposures, as well as significant non-bank treasury counterparty exposures.

The spokesperson says this provides the capacity to deliver a treasury finance service while maintaining accurate and timely control of credit risks associated with trading. RXM's development toolkit also includes derivatives pricing functionality, though GEIS officials say that in practice most users upload derivatives revaluation data from internal systems. This reduces the cost of operating RXM, which is charged for by usage, as well as avoiding potential market value discrepancies between the respective systems' derivatives pricing methods.

According to GEIS officials, RXM is currently in use at over 15 banks worldwide including ABN Amro, Banque Indosuez, Bank of Montreal, Dresdner Bank and Swiss Bank Corp. Canadian Imperial Bank of Commerce is running a customised version of RXM.

This installation provides real-time on-line management of the bank's foreign exchange credit risk, forex options, interest rate derivatives and commodities (Derivatives Engineering & Technology, July 10, 1995).

Australia New Zealand Bank deploys RXM across a network of 42 sites in 23 countries around the world to monitor credit and market risk across a broad range of treasury and derivative products on a real-time, on-line basis (DE&T, June 12, 1995).

As with GEIS's other systems - including its Global Limits System (GLS) and Ordex futures order-routing service - RXM is based on the vendor's Mark III proprietary relational database and its global telecommunications network.