Wall Street Systems Central Banking Solution

23 September 2009

Content

2

• Brief overview of organization

• Central Banking clients

• Value proposition

• Solution overview

• Questions and Answers session

Agenda

3

• Brief overview of organization

• Central Banking clients

• Value proposition

• Solution overview

• Questions and Answers session

4

Company Snapshot

Clients • 300+ clients from 45 countries• Corporations, banks, central banks, government

agencies, asset managers and financial institutions

People • 500+ employees• Broad domain knowledge and experience• Over 75% dedicated to serving clients

Solutions • Treasury – corporations and financial institutions• Front-to-back trading• Cross-asset back-office

Offices • New York and London headquarters• 11 offices (7 Europe, 3 Americas, 2 Asia)• 5 development labs

Financial • Approximately $150 million in revenues• Growing and profitable• Backed by Warburg Pincus

Agenda

5

• Brief overview of organization

• Central Banking clients

• Value proposition

• Solution overview

• Questions and Answers session

28 Central Banking clients

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Belgium$15 Billion

France$113 Billion

Finland$9 Billion

Bulgaria$21 Billion

Estonia$4 Billion

Germany$142 Billion

Greece$4 Billion

Italy$104 Billion

Morocco$26 Billion

Netherlands$29 Billion

Poland$74 Billion

Portugal$12 Billion

Russia$426 Billion

Slovakia$18 Billion

South Africa$32 Billion

Spain$19 Billion

Thailand$101 Billion

Europe$530 Billion

Trinidad& Tobago$8 Billion

Uganda$1.4 Billion

Over 98% of the Euro zone reserves , Over 60% of African Reserves

Tanzania$2.4 Billion

Nigeria$58 Billion

Chile$18 Billion

Croatia$14 Billion

Algeria$138 Billion

Qatar$6 Billion

Oman$7 Billion

Israel$47 Billion

Government Segment recent wins

2009:

2008:

2007:

2006:

Croatia$14 Billion

Algeria$138 Billion

Qatar$6 Billion

Netherlands$29 Billion

Slovakia$18 Billion

Italy$104 Billion

Tanzania$2.4 Billion

Nigeria$58 Billion

Chile$18 Billion

Oman$7 Billion

Israel$47 Billion

Contract closing with 2 other central banks before end of the year

Other government clients

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State Treasury Of Finland

Portuguese Government Debt Agency

Ministry of Finance, Slovakia

Andean Development Corporation

The Netherlands Development Finance Company

 

Agenda

9

• Brief overview of organization

• Central Banking clients

• Value proposition

• Solution overview

• Questions and Answers session

Value Proposition

What makes our Central Banking proposal unique:

1. References

2. Software

3. Dedicated R&D

4. Pre-configuration

5. Specialized Consultants

6. Known as a partner of Central Banks

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1. References - 28 Central Banks

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Belgium$15 Billion

France$113 Billion

Finland$9 Billion

Bulgaria$21 Billion

Estonia$4 Billion

Germany$142 Billion

Greece$4 Billion

Italy$104 Billion

Morocco$26 Billion

Netherlands$29 Billion

Poland$74 Billion

Portugal$12 Billion

Russia$426 Billion

Slovakia$18 Billion

South Africa$32 Billion

Spain$19 Billion

Thailand$101 Billion

Europe$530 Billion

Trinidad& Tobago$8 Billion

Uganda$1.4 Billion

Over 98% of the Euro zone reserves , Over 60% of African Reserves

Tanzania$2.4 Billion

Nigeria$58 Billion

Chile$18 Billion

Croatia$14 Billion

Algeria$138 Billion

Qatar$6 Billion

Oman$7 Billion

Israel$47 Billion

2. Software - Business Process SupportSupport for numerous central bank business processes

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Accounting

Back office

Middle office

Front office

Common framework for posting generation

Monetary policy tenders

General ledger

Reserve management

Other investment

management

Other Processes

IMF, correspondent banking, payments, FX bank notes, etc.

Representative interfaces

Market info: Reuters, Bloomberg

Trading: Reuters dealing, web portal

Common operational processes + controls

Common limits + compliance framework

RiskMetrics: VaR data, RiskManager

Rating agencies, external benchmarks

SWIFTDomestic RTGSDomestic security settlement

Common performance measurement framework

Specific deal capture+ position keeping using common tools

Monetarypolicy

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Examples of Supported Business Processes

• Execution of foreign exchange policy operations • Management of own foreign reserve

including Gold

• Correspondent Banking• Payment Services• IMF loans• Loro accounts

• Monetary policy• Liquidity forecasting• Execution of monetary policy operations• Cheque processing

• General investment management• Own capital• Employee/other government pension funds• Deposit guarantee funds• Funds to back bank note issuance• Dependent state funds• Oil fund• Stabilization fund • Private client• Ministry of Finance funds

• Asset and liability management• Bilateral lending• Regional lending

• Service operations• Banking operations• Custodial services for central banks and foreign institutions• Foreign currency debt administration• Foreign currency banknote trading• Banking services to corporate and private clients.

3. Dedicated Research & Development

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The total development effort Wall Street Systems has invested in Wallstreet Suite is estimated as over 1,000 men years

Central Bank’s needs and operations differ from those of commercial banks’

Since 1997 more than 200 men years effort has been invested to enhance our product to cover all the Central Bank specific functionality

This includes:

The Central Bank Accounting Module (ECB guidelines) now in its third release.

Enhanced Real Time Limit Management

Performance Measurement and Attribution as well as Portfolio Modeling

Extended Instrument Support (various bonds, BIS instruments, etc.)

Collateral Management

Risk Management

We maintain a dedicated roadmap for Central Banks

4. Preconfigured System for Central Banks

Wall Street Systems is the only vendor that has a dedicated pre-configured solution to support foreign reserve management and monetary policy operations

Pre-configured system contains components like Instruments, Workflow, Portfolio Structure, Counterparts, Limits, SWIFT messages, and Reports

This solution was originally based on the ECB configuration and later evolved to adapt to the requirement of other central banks.

Our central bank implementation methodology is based on this pre-configured system.

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5. Dedicated Team

Wall Street Systems is the only vendor who has a dedicated Central Banking business unit.

This includes experienced consultants with personal background or experience in Central Banking.

It has taken years for Wall Street Systems to build up that level experience.

Since every country has only one Central Bank such knowledge can only be established by a global dedicated central bank business unit.

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6. We are known as a partner for Central Banks

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We know Central Banks and they know us.

We are honored member of the CB forums.

Central Bank User Forum chaired by ECB provides an excellent opportunity to work together with Central Banks.

We work together with World Bank in many projects.

Agenda

18

• Brief overview of organization

• Central Banking clients

• Value proposition

• Solution overview

• Questions and Answers session

Full support for the entire investment management process

Investment policy

Benchmarkand guidelines

Core portfoli

odata

Investment strategies/benchmark deviation

Assetselection

Risk management & compliance

Performance measurement and attribution

Set in terms on benchmarks and guidelines

Benchmarks to be created and maintained. Positions to be monitored in relation to benchmarks and investment guidelines.

Strategies to be assessed using simulation and scenario analysis to assess their impact on risks and returns

Transactions executing the strategy to be captured, settled,

controlled and accounted for

Compliance to be monitored and

controlled using limits and other

checks

Performance to be measured and assessed, and

sources of performance

identified.

Complete range of instruments Wallstreet Suite

On-BalanceSpotsForwardsSplit-date dealsNon-deliverable forwards

DerivativesSwapsOptions (American, European, Compound, Digital)Futures*

*Planned for 7.1.5 (December 2006)

CashPayments, Transfers, Balances, ForecastsCash accounts, Call money

On-BalanceDeposits/LoansDiscount papersRepos

DerivativesFRAsOption on FRAsDiscount papers Forwards and Futures

On-BalanceEquity & Index linked

(single and basket)Mutual fund sharesSubscription rights

DerivativesForwards

FuturesIndex forwardsIndex futures

OptionsOption on indices

Complex payoff Multiple legs

Composite type of swapTime split

Optional/triggered call-put/cancelOptional/triggered currency conversionFlippable (conversion option from one

structure to another)Dual currency

Rainbow (multi-currency)Range accrual

On-BalanceBonds/Convertible bonds

Index-linked bondsStep-up/down, ABS/MBS

FRNs/Inverse FRNsSchuldsscheindarlehen,

Brazilian instrumentsFixed, Floating and

Variable rate Loans/NotesDerivatives

Interest rate swapsConstant maturity swaps

Bond futures & forwards, Bond optionsSwaptions, Caps, Floors, Collars

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Broadest range of risk figures

Basis point risk

Duration & convexity

FX exposure

Equity exposure

Greeks

Parametric VaR

Expected tracking error 

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IR, EQ Scenario

Price shift (MM,FX,EQ)

Volatility

Time, horizon return analysis

Multi factor simulations

Tracking error

Volatility

Standard deviation

Sharpe ratio

Jensen’s alpha

Treynor measure

Regression analysis

Issuer

Counterparty

   Settlement

Rating 

Position & Transaction Information

Position & transaction information 

Valuation cashflows over time

Price

Market value

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Some Basic Concepts

• Concepts of:-

Portfolio hierarchy

Workflow / STP

Real-time

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Portfolio concept

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Workflow concept

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F/O – B/O – Acc: Trade Workflow

OPEN VERIFY FINAL

F/O

Pricing, Capture

B/O

Verification, Confirmation, Settlement

Confirmation

Settlements

Accounting

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Trade Workflows concept

Open

F/O-Verify

B/O-Verify

F/O B/O

B/O-Verify-

2nd

FinalCommit

If junior trader If complex trade

Verify

Fully configurable transaction flow (forward and backward, unlimited number of states, parallel flows)

Rule based transaction flow

Rules based on User, Instrument group, Portfolio, Counterparty group, Transaction type, Deal Nominal Amount etc.

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Real-time principle

• Wallstreet Suite always displays the latest available information without a new query being launched (risk, position, and valuation).

• Risks, Market Value, Limits and other Key Figures are re-calculated as soon as there is a change in the position and/or a market variable.

Agenda

28

• Brief overview of organization

• Central Banking clients

• Value proposition

• Solution overview

• Questions and Answers session

Questions and Answers