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Hypo International Strengthens Risk Management with a Large-Scale, Secure Spreadsheet-Management Framework

Risk Integrated, Douglas, Isle of Man, IM1 2LH, British Isles
Risk Integrated, Garrison, New York 10524
Hypo Real Estate Systems GmbH, Münich, Germany
yusuf.jafry{at}riskintegrated.com
chris.marrison{at}riskintegrated.com
ulrike.umkehrer{at}hyposystems.de

We present the solution that Hypo Real Estate Bank International (Hypo) implemented to perform Monte Carlo simulations of its commercial real estate credit risk. The solution uses Risk Integrated's proprietary software, the Specialized Finance System, which is supported by another Risk Integrated technology, the Enterprise Spreadsheet Platform. The platform embeds individual master spreadsheets within a high-performance, server-based, computational-engine architecture; thus, it enables them to be accessed enterprise-wide. The major benefit of this approach is the near-elimination of spreadsheet risk in Hypo's banking system. The solution allows domain experts to have the flexible programming power that spreadsheets provide; however, it does not sacrifice the reliability and auditability expected from traditional business applications.

Key Words: software; risk management; systems; models; portfolio; banks; insurance; investment; commercial real estate; simulation; Basel II