Mellon launches OTC derivative valuation service

Mellon Financial Corporation (Nyse: MEL) has introduced an independent, over-the-counter (OTC) derivative valuation service for a wide range of swaps and options to institutional clients. Mellon will provide these valuations through third party vendors, at the institution's direction.

"A changing regulatory climate, along with increasingly tougher risk and compliance requirements, will motivate institutions to seek independent valuations so they do not rely entirely on their investment managers and prime brokers," said Daniel Wywoda, senior vice president, Mellon's Asset Servicing group. "The market is moving toward suppliers that can provide independent valuations for a wide range of OTC derivatives besides the two most common, interest rate swaps and credit default swaps. We also can obtain valuations for default basket swaps, total return swaps, currency swaps and inflation swaps, among others."

Providing services to support derivatives trading is a strategic area of focus for Mellon. Additional developments planned in this area throughout the next 18 months include enhanced derivatives reporting, transaction processing, and risk and collateral management, Wywoda said.

Source - http://finextra.com/fullpr.asp?id=12840

Podcast: Brad Bailey on Credit Derivatives

Aite Group Senior Analyst Brad Bailey Expects Buy-Side Firms in North America and Europe to Spend About $200 Million on Technology to Handle Credit Derivatives

Regulatory pressure on the credit derivatives dealers is prompting the buy side to automate its own processing. Firms are spending money on OMSs but looking to free tools such as DTCC's DerivSERV for confirmation matching.

Source: Wall Street and Technology
Date: December 25, 2006
URL - http://www.wallstreetandtech.com/blog/archives/2006/12/post_1.html