Banorte Deploys Bloomberg’s MARS

Mexico’s Grupo Financiero Banorte (Banorte), has adopted Bloomberg’s Multi-Asset Risk System (MARS) hedge management solution to determine the effectiveness of coverages recommended to clients.

Bloomberg says MARS has functionality to support the documentation, evaluation and measurement/accounting of the impact of hedges, and is designed to help clients comply with US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). This means Banorte can calculate the effectiveness of its clients’ hedging strategies to mitigate interest rate risk and test the performance of the recommended hedges using a retrospective and/or prospective approach.

This allow it to promptly comply with some of the requirements of the Mexican central bank’s new derivatives rules, Bloomberg observes, adding it will also help address increasing requirements for hedge accounting and related financial instrument regulations.

“Innovation and adherence to best practices is an essential part of our business in financial risk management,” says Abraham Izquierdo, deputy general director of financial risks at Banorte. “We are always looking for new ways to offer value to our clients and the implementation of MARS products provides us with the latest technology to have robust processes that support and optimise risk management, aligning risk management with the strategic vision of our institution.”

Rachid Lassoued, global head of financial engineering and risk at Bloomberg, adds, “Using MARS hedge accounting will enable greater transparency in your hedge accounting practices and help your clients evaluate their hedging strategies reliably and regularly.”