JP Morgan Chase launches buy-side risk management product

Demonstrated at Risk magazine's ninth annual Risk USA conference in Boston, the internet-based application hosts risk software for use by clients that provide positions or transaction feeds to MorganRisk. The information is then analysed using the firm’s proprietary value-at-risk, sensitivity analysis and stress-testing models. A JP Morgan Chase spokesman said client trading information would be kept separately from its bankers. "The walls are 'high and thick'," he said.

MorganRisk, which will be beta tested in July, will initially cover a number of vanilla instruments, including equities, vanilla equity derivatives, fixed income, vanilla interest rate and foreign exchange derivatives, commodity derivatives and most mortgage-backed securities. The bank plans to expand the coverage after the intial launch period to include non-vanilla derivatives.

Clients can access the service on a number of different levels, from a basic set of risk exposure reports on a pre-determined schedule to on-demand reporting and online analysis for a number of users.

"MorganRisk will provide all the necessary market data and will use valuation models developed by traders, rather than by academics," said Lesley Daniels Webster, executive vice-president and head of market risk management at JP Morgan Chase. "The result is a risk service that covers more assets, more accurately than other commercial vendors."