Bank One Corporation - Page 253

                                        -93-                                          
               The Los Alamos team spent the most time for the software               
          project on developing strong foundations for pricing plain                  
          vanilla swaps, which were the bulk of instruments traded in the             
          market.  The Commissioner believed that strong foundations for              
          building models in these instruments had to be established first            
          before models could be built for the more complicated nongeneric            
          products.                                                                   
               After having spent more than 3 years and at least $2.6                 
          million on the Los Alamos Project, the Commissioner suspended the           
          project in late 1997 primarily because of budgetary constraints.            
          There were internal concerns about computer spending during this            
          time and a particular concern about additional funding for the              
          project because any product that was developed would require                
          subsequent budgeting for costs connected to Los Alamos’s need to            
          fine-tune the product.                                                      
          VI.  FNBC’s Swaps Business                                                  
               A.  Overview                                                           
               FNBC began dealing in interest rate and currency swaps in              
          1983 and began dealing in commodity swaps in 1989.  To date, FNBC           
          has traded in at least 17 currency markets, including U.S.                  
          dollars, Canadian dollars, Australian dollars, deutschmarks,                
          sterling, yen, Swiss francs, ECU’s, and pesetas.  FNBC is an                
          innovator of interest rate products and is a leading provider in            








Page:  Previous  83  84  85  86  87  88  89  90  91  92  93  94  95  96  97  98  99  100  101  102  Next

Last modified: May 25, 2011