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The antecedent of the
Novarum Global Trading operating model was stress tested and validated
over a period of ten years at JPMorgan Chase and Citigroup. Market
participants and regulatory agencies recognize the management team
of Novarum as the market leading practitioners in the risk management
of CCR.
The Novarum Global Trading operating model is distinct from that of
credit derivative product companies (“CDPCs”), structured
investment vehicles (“SIVs”) and traditional monoline
financial guarantors. In contrast to these companies, the risk practice
of Novarum Global Trading is based upon the continuous replication
and decomposition of all market and credit risks into plain vanilla
OTC derivative products. Furthermore, all CCDS and associated hedge
transactions are executed under fully margined CSAs to mitigate any
CCR to Novarum Global Trading.
While recent market events have raised concerns about the efficacy of the operating models of select CDPCs, SIVs and monoline financial guarantors, Standard and Poor's Rating Services have reconfirmed their intent to rate Novarum Global Trading GmbH based upon its proposed operating guidelines and capital model. |
