Rabobank to expand corporate risk management services

Rabobank plans to expand its interest rate and currency consultancy services for corporate clients from January 1 2003, providing online updates of the market value of outstanding corporate treasury transactions.

The Dutch bank said the new service will help determine on a daily basis whether its clients’ current derivatives position are still in line with the framework that was agreed and determined when entering into the treasury relationship.

"The new working method fits in perfectly with the International Accounting Standards that will go into effect on January 1, 2005. We want to send a clear signal to our corporate clients by accepting responsibility for a careful and transparent mutual relationship. Analysing the client's knowledge level and business situation in this way makes it possible to carefully fine-tune products accordingly," said Paul Dirken, director of corporate clients in the Netherlands.

The main thing that will change for clients is that a risk profile will be formulated together with the account manager. More product and risk information will also be made available, Rabobank said.

In addition, corporate clients will be able to track the development of the mark-to-market value of their outstanding treasury deals on a dedicated website. If this amount is in danger of being exceeded, the client and his account manager will be notified electronically.

Rabobank has also developed special derivatives documentation and contracts in Dutch in accordance with Dutch law. In the past, International Swaps and Derivatives Association documentation was available only in English in accordance with English law, which made it difficult for clients to estimate financial business risks, the bank added.