Following the 2007-2008 financial crisis, European banks have issued new types of hybrid financial instruments to match regulatory capital requirements. These « co-co bonds » are bonds that are converted into shares if the issuer’s capital falls below set thresholds. Because of their contractual complexity and of systemic risks in the banking system, valuating these instruments is extremely difficult.

TheMarketsTrust has partnered with Pr. Wim Schoutens of Leuven University (KUL), a pioneer in the modelization of co-co bonds, to develop a new generation of tools for the evaluation of these financial instruments. Leopard Workstation, a real-time risk analysis platform developed by TheMarketsTrust, will be used as the technological basis for the completion of this project.

In the long term, TheMarketsTrust will integrate other types of complex financial instruments into the Leopard Workstation platform, so as to offer to investors a real-time risk monitoring of their complex instruments portfolio. TheMarketsTrust will become a European alternative to existing rating agencies, of which investors are currently dependent.

TheMarketsTrust is supported by LuxInnovation, Luxembourg national agency for innovation and research, and by BGL-BNP Paribas through its incubator LuxFutureLab.

To know more about TheMarketsTrust: www.themarketstrust.com