Altana FT: How Safe is Your Bank? New Tool Warns When Money at Risk

Altana Venture Capital Group, managed by ex-J.P. Morgan banker, Bob Adler, announces the launch of an early warning system for financial services professionals, alerting them in real-time to increased risk of institutions with financial backing from successful hedge fund manager, and co-founder of Trafalgar Asset Managers, Lee Robinson. Altana Fat Tails as the product is known monitors credit default swap (CDS) spreads "´ a key indicator of how "˜risky´ the market "´perceives a finance firm or other entity to be. The data is based on cleansed and aggregated real-time price quotes obtained directly from the information sent by sell-side traders to their clients so producing a constant feed of intraday spreads.

The tool allows subscribers to select which financial institutions they want to monitor from a list of 1,200 entities worldwide. This encompasses Sovereigns, Corporate and Financial Institutions located in North America, Europe, Asia, and the emerging markets. Alert events can be based on a tracked entity breaching the user´s chosen CDS spread threshold or falling below a chosen floor, as well as on changes to credit ratings implied by these spreads.

Lee Robinson, founder and CIO of Altana commented: "I have been using CDS spreads for many years as a key early warning system for assessing the risk of particular companies, regions or institutions and this was vital in helping me to predict and hedge against the last financial crisis. The CDS market comprises a relatively small number of sophisticated investors whose views of an entity´s solvency and expected share price volatility, as expressed in CDS prices, are really worth knowing about. Whilst not perfect, CDS spreads are regarded as the best measure of current and short term outlook of unexpected events, and have proven to do so especially in periods of crisis."

He added: "Sophisticated traders and investors have known about this tool for years but I have always felt that it is important that we make this available to a wider audience, so that more people can protect their money and their jobs. For anyone in the risk business, particularly treasurers and corporates, this is a vital alert system that can be used to inform decisions about trading with particular companies or regions, or placing money with particular financial institutions."