Bloomberg Selected by Banorte to Support Derivative Collateral Monitoring Compliance

Mexican financial firm Grupo Financiero Banorte adopted Bloomberg’s MARS Hedge Accounting solution to determine the effectiveness of hedges recommended to clients in various market conditions.

Additionally, Banorte uses MARS Front Office and MARS Counterparty Risk, as well as MARS Hedge Accounting, which offer the company a full set of risk management capabilities.

MARS Hedge Accounting functionality supports the documentation, assessment and measurement of hedging impact and is designed to help clients comply with US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).

By applying MARS hedge accounting, Banorte will be able to calculate the effectiveness of its clients’ derivative hedging strategies to mitigate interest rate risk.

“Innovation and adherence to best practices are an essential part of our financial risk management business,” said Abraham Izquierdo, Banorte’s managing director of risk and trading.

“We are always looking for new ways to deliver value to our clients, and implementing MARS products provides us with the latest technology for robust processes to support and optimize risk management, aligning risk management with the strategic vision of our institution.”

Banorte can test the effectiveness of recommended safeguards using a retrospective and/or prospective approach, which will enable the company to meet some of the requirements of the Central Bank’s new derivatives regulations.

MARS will also help meet the growing requirements for hedge accounting and related financial instruments regulations.

“We are pleased to continue to support Banorte and deliver value through MARS Hedge Accounting to help them achieve additional efficiencies in both their workflow and their clients’ workflow,” said Rachid Lassoued, global head of financial engineering and risk at Bloomberg .

“The use of MARS hedge accounting will enable greater transparency of hedge accounting practices and help their clients reliably and regularly evaluate their hedging strategies.”