The Trade Lifecycle: Behind the Scenes of the Trading Process, 2nd Edition

Chapter 18 Case Studies

The aim of this chapter is to give the reader an insight into how real life IT projects happen in investment banks. Each case study is a true account based on the actual experiences of the author. These particular examples have been selected to highlight cases from different banks, asset classes and areas within banks and to provide as great a range of problems and solutions as possible.

18.1 Case study 1 – Bonds

This case study is taken from a project to build a fixed income (bond) platform for the middle office in the UK division of a large Dutch bank called Rabobank. The project became known as RABOND.

Rabobank background

Founded in the 19th century, with the full name Coöperatieve Centrale Raiffeisen-Boerenleenbank BA, Rabobank is a Dutch multinational banking and financial services company. Global Finance currently ranks Rabobank in the top ten of the world's safest banks. Its headquarters are in Utrecht in central Netherlands. The bank was founded as a cooperative movement of credit unions and rooted in agriculture. Its ties with agriculture remain strong and the bank has leveraged its substantial retail bank presence in the Netherlands with international investment banking subsidiaries, one of the more prominent of which is based in London.

Like most banks, Rabobank held a large portfolio of bonds and was active in hedging using credit default swaps (CDS). The fixed income desk was a very important component of the London-based Capital Markets ...