Alchemy Technologies has developed a Risk Management and Reporting Solution which enables banks to:

	Calculate their Capital Adequacy Ratio under Basel II requirements
	Calculate the credit, market and operational risk capital charge under the Basel II Standardized Credit, and Basic Indicator approaches as well as under the Foundation IRB model specified under the BIS Revised Framework.
	Perform and report the results of the stress testing on the entire bank balance sheet including ALM and ALCO requirements and Duration Gap.
	Provide the necessary risk management reporting framework required for compliance with Authorized Derivative Dealer and Non Market Making Institution license for derivative trading.

Alchemy Risk Manager (ARM), also offers a broad array of additional functions which include:

	an Asset Liability Management module (Price, Maturity and Duration Gaps at transaction and summary level data for deposits, advances and investments)
	a derivative pricing engine
	a Value at Risk (VaR) and Mark to Market (MTM) model for traditional products ( Equity/Forex/Money Market)
	VaR and MTM model for derivative products ( Interest Rates, Structured Currency Options, Participating Forwards) and an interest rate simulation model
	Portfolio benchmarking
	Back testing tool kits

Primary user groups for the Alchemy Risk Manager (ARM) include the Financial Reporting and Compliance Unit, The Risk Management Group, Asset Liability Managers, Treasury Risk Managers, Traders and Dealers. At the Financial Reporting and Compliance level ARM provides an independent cross check on pricing engines as well as the ability to estimate the incremental and marginal impact of transactions on capital adequacy, value at risk, duration gap and other risk parameters.
The software comes with the advantage of being constructed with active feedback from well reputed bankers and treasury users. Over the last two years it has been tested on an ongoing basis, and is currently being used by six customers in Pakistan (five banks and a life insurance company).

	Basel II Pillar I + II
	Basel II Calculator to compute Capital Charge for Market, Credit and Operational Risk Uses standardized approaches Uses Internal models approach

	Market Risk
	Treasury and forward rates calculator Benchmarking and backtesting toolkit Risk adjusted return and analysis VaR capital charge Internal capital charge Limits Management

	Asset Liability Management
	Earnings at Risk Net interest income at risk Price and rate gaps Duration Gap Capital at Risk Reports

	Stress Testing
	Worst case scenarios and shocks for Market, Credit, Interest Rate and Liquidity risk Scenario Analysis Paper Trades

	Value at Risk
	Variance Co-Variance Historical and Monte Carlo Simulation with incremental VaR Full Valuation, Delta Normal and variance reduction options.

	Derivatives
	Interest Rate Swaps FRA’s Currency Options Structured products Derivate VaR ADD and NMI disclosures

FIRB – Foundation Internal Rating Based Model

	Adjusted data set for use with Risk Manager computing
	KSE equities corporate action adjusted data, 1997-2007