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BNP Paribas has expanded its use of CobaltFX's Dynamic Credit solution to improve credit allocation for foreign exchange (FX) transactions and enhance liquidity access. The bank now uses the system to calculate credit across 12 Electronic Communication Networks (ECNs) for over 100 counterparty banks.
The expansion aims to address regulatory and industry concerns about credit distribution in dealer-to-dealer venues. BNP Paribas, an early adopter of the technology, is using it to optimize global credit and eliminate carve-outs.
Joe Nash, Head of Global Macro Digital, BNP Paribas
Joe Nash, Head of Global Macro Digital at BNP Paribas, said: "We see this as an important initiative to address regulatory and industry body concerns about the over-allocation and inefficiencies of credit distribution on dealer to dealer venues. Moreover, this approach, combined with CobaltFX Analytics allows us to right size our limit for each counterparty whilst improving market access with them."
The bank is also utilising CobaltFX Analytics, a newly developed tool, to further enhance its credit allocation process.
Darren Coote, CEO, CobaltFX
Darren Coote, CEO of CobaltFX, commented on the development: "This systemic problem has been long over-looked but there are a group of leaders in the industry that understand the benefits of this unique approach. We are very grateful for BNP's leadership in this regard."
CobaltFX, part of United Fintech, provides solutions aimed at improving efficiency in FX markets. The company, founded in 2015 and headquartered in London, focuses on re-engineering FX processes to give more control to credit providers and reduce post-trade operational risk.
