Customer & CounterpartiesPartnerAll main partner information (private customers, corporates, institutional clients, banks and brokers) gets delivered via interface (partner file) from one ore more central administration systems (host). Each information can be maintained in TEMOS.Partners that are depending on each other can be linked in TEMOS. Partner HierarchyPartners can be linked in hierarchies. All advance values and exposures will consequently be consolidated and supervised on the next partner level with a limit. If spoken of limit mothers, it stands for the top most hierarchy level with a limit (e.g. supervision level). Partner Connection / RelationsA connection symbolizes a pledge situation. There are two main kinds of pledges:
ProductsTo identify and calculate a product in TEMOS all bank products need to be allocated to the product tree of TEMOS. This structure enables also product groups and therefore simplifies processes and maintenance.
CalculationFormulasCalculation takes place according to different formula books. To each product out of the product tree different formulas can be allocated. Formulas are maintained dynamically without the need of programming support. Different haircuts and condition rates can be used for different calculation schemes (e.g. market value, replacement value, Margin/Add-on, Exposure (replacement value + add-on).The variety of calculation schemes in TEMOS in unlimited. RatesStandard conditions (haircuts) on securities or products can be allocated dynamically every day through CO-R (Collateral Rating System) based on financial informations. Furthermore a fix allocation of rates is possible as well. Besides these default conditions, special conditions per customer can be input in TEMOS also. HedgesAfter the calculation of positions the following functions will be taken into account as well:
ConsolidationCalculated positions are consolidated on the limit mother of the partner hierarchy. Consolidated positions are taken into consideration for limited and unlimited pledges. BART - The Bank Rating ToolBART is a section in TEMOS that supports credit officers in analysing counterparties. Primary goal of the tool is to define the maximum risk appetite with the counterparty. Values need to be input. The system fills in the score and calculates the suggested maximum risk and settlement limits. All input figures and information are stored and can be reviewed by simply changing the date in the header. Additionally information is printed on the report ‘bank limit request’. According to individual figures, an internal rating is calculated. Other ratings are calculated according to external, country and Long-term debt ratings. The average risk rating is rounded off to the next higher rating. Credit Officers with the according authority can overwrite the result if needed. LimitsLombard LimitThe Lombard limit is the standard line for collateralized limits for private or institutional clients. Generally it’s used as overall line that only seldom is restricted to special products. Risk exposure that is set off to a Lombard line is replacement value & add-on. If possible and legally allowed, netting is included (e.g. cash or FX).
Risk LimitRisk limit is an unsecured line with allocation on product level (product risk limit). This limit type is used for counterparties (banks, institutional clients, brokers). Risk is calculated replacement value & add-on.
Volume LimitThe volume limit is to control and for the limitation of open contract volumes on product level. The limit is set off with all notional amounts of open contracts: Total pro product and currency. Goal: Limitation of trading activities of counterparties.
Threshold LimitUnsecured line where losses will be set off against. If the sum of all losses (realized and unrealized) exceeds the limit, the excess needs to be cleared with collateral. The kind of assets allowed as collateral is settled in a netting agreement. Close-out-netting can be agreed on without a threshold limit.
Settlement LimitThe settlement limit is used to provide FX-Trading-Systems with information. Limits are maintained in TEMOS, supervision takes place in trading systems.
FX Thrd Party AgreementAn FX Third Party Agreement limit only has informative character and is used within inter banking business (e.g. partner, which deals in the name of the bank with another bank)
Fix UnsecuredFix Unsecured is a line similar to Lombard line (equal risk calculation), but without collateral. Fix Unsecured normally is provided to private and institutional clients.
Fix Secured other SecuritiesSecured limit for which special security is granted as collateral (e.g. assets with no daily market price as an insurance policy)
Fix Secured by PropertySecured limit, which has land as collateral. The exposure is called indirect exposure (compared to a mortgage, which generates direct exposure). Usage is normally in cash or in money market (fixed term loan).
Construction loanOver-all-limit to grant cash in connection with the construction of the real estate. After termination of the construction, the loan normally gets consolidated into a regular mortgage.
MortgageOverall mortgage limit to be used with different, fixed money market deals.
Product limitsOverall limits can be restricted to defined product groups and per product group to time buckets and/or currency tiers. Country limitsPer country Risk and/or Volume limit can be input.
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