Bank One Corporation - Page 44

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          confidence level.  Each of the table versions produced the                  
          maximum number within the chosen confidence level.                          
               The next series of versions of the VEP system were on line.            
          The first version of the on-line system allowed traders to pull             
          up information on their screens.  Traders input details of trade,           
          and the machine calculated the exposure numbers based upon the              
          tables then in use.  The resulting CEM amount was then added to             
          the customer’s existing credit exposure.  During 1993, traders              
          could for purposes of discussions have used tables to calculate             
          the CEM amount or they could have gone on line.  For actual                 
          transactions, FNBC preferred that the traders and marketers use             
          the on-line system.                                                         
                              ii.  Effect of the System                               
               FNBC’s VEP system allowed traders and marketers to do                  
          business without going to the credit department if a VEP credit             
          limit had been established for that customer and if the new swap            
          would not exceed that credit limit.  It allowed FNBC to move away           
          from each swap’s being individually approved by the credit                  
          department.                                                                 
               The VEP system permitted the establishment of VEPLs, under             
          which multiple VEP transactions with the same counterparty were             
          permitted as long as the VEPL was not exceeded.  A VEPL was                 
          required to be renewed at least annually.  Once a VEPL was                  
          approved, traders and marketers could conduct transactions with             






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Last modified: May 25, 2011