Toomre Capital Markets LLC

Real-Time Capital Markets -- Analytics, Visualization, Event Processing, and Intelligence

Wall Street & Technology on Grid Computing

Wall Street & Technology has published an article written by Paul Allen entitled Banks Take Their Places on the Grid. The article focuses on how grid computing is helping to alleviate Wall Street’s ever-increasing demand for more and more computational power as both portfolio and risk managers strive to get an accurate view of each fund’s value and associated risk with the increasing use of credit derivatives and other exotic investments. The article goes on to quote Chad Hersh, a senior analyst from Celent, who wrote in a recent report entitled ‘Grid Computing: A Guide For Financial Services Firms’ that “Grid computing is going to be a major investment for virtually every large company, financial services or otherwise.

As the WS&T article explains, “In essence, a grid leverages all the different pieces of a firm's hardware -- which can include anything from a laptop to a mainframe -- to form a huge pool of computing power. When a task or calculation is submitted for processing, the grid software divides it up and farms those pieces out to wherever it has identified available computing capacity; once completed, the parts then are reaggregated. And because the grid can make use of idle desktops and inexpensive servers, for example, it provides firms with the ability to scale up their computing resources faster and more cheaply than previously possible.” The article notes that grids have proven to be particularly adept at processing computationally intensive tasks that traditionally take considerable time to complete and often are run in batch-type cycles, such as derivative pricing analytics, Monte Carlo simulations, portfolio performance analytics and calculating the value and incremental risk profile of portfolios as the result of trading activity.

Toomre Capital Markets recommends that all those interested in risk technology or enterprise risk management thoroughly review both of these articles on grid computing as this clearly is a direction cost-effective ERM is headed at leading financial services firms. Comments and thoughts are welcome.