Kamakura Corporation announced that China Construction Bank has gone live with its enterprise wide risk management software system Kamakura Risk Manager (KRM) for asset and liability management on September 10, 2010. China Construction Bank uses KRM to manage interest rate risk and the liquidity risk of their banking book. KRM is configured in production to perform a wide range of calculations: market valuation, net income simulation with rollover, new business and rebalancing targets and assumptions as well as with customer behavioral models, net income stress testing under various regulatory scenarios and business scenarios, and economic capital calculations for interest rate risk.
The Bank uses KRM to analyze 3.5 million transactions and to produce daily, monthly and quarterly reports for the Bank. Dr. Donald van Deventer, founder and CEO of Kamakura Corporation, commented on Thursday, “Kamakura is very honored to work with one of the largest and most prestigious banks around the world, China Construction Bank. The Chinese banking industry is one of the fastest growing and most dynamic banking sectors in the world. We are gratified that banks in Beijing have leap-frogged the traditional silo-oriented risk management strategy to take a full enterprise wide view of risk. Given economic development and interest rate liberalization in China, it is essential that China’s sophisticated banks put the best risk management software in place as soon as possible. We believe that China Construction Bank has made significant progress in risk management in a short period of time. Many banks in North America have expressed admiration that the Bank can move forward more quickly than organizations burdened with legacy systems and a silo risk political organization.”
China Construction Bank is China’s second largest bank and the second largest bank in the world by market capitalization, according to the Financial Times. The Bank has 13,384 domestic branches with total assets of 9.6 trillion RMB in 2009. China Construction Bank has been an industry leader in asset and liability management practice in China. To build the organization into a first class global bank, China Construction Bank endeavors to adopt the best practice in risk management. Live production of KRM is an important milestone of its continuous effort to reach the best practice in risk management.
D.C.