About Rao Chalasani
Rao Chalasani is an accomplished professional with more than 15 years of experience in the financial services industry in New York. During the course of his career, Rao Chalasani has gained extensive familiarity with the design and implementation of cutting-edge technology in risk management and global markets trading. Currently, Rao Chalasani is the sole inventor of the U.S. patent-pending Enterprise Risk Management System. His work with order management systems and vendor trading covers technology such as WinFITS Aurora, Neovest, SunGard, Summit, Infinity, and Bloomberg. Beyond his experience with financial services technology, Mr. Chalasani excels in the business arena as a strong team leader and a skilled negotiator.
Rao Chalasani holds a Bachelor of Science in Engineering from the Polytechnic Institute of New York University. While completing his degree, he was the only engineering student recruited by JP Morgan Chase to participate in the Leadership and Management Development Program. After serving for nearly two years as Project Manager of International Capital Markets for JP Morgan Chase, Rao Chalasani joined Merrill Lynch as Assistant Vice President of Capital Markets & Fixed Income Technology. Continuing to advance in his career, he joined Deutsche Bank in 2002 as Senior Project Manager and Vice President of Global Markets. In 2005, he achieved the position of Chief Technology Officer and Risk Strategist for Merrill Lynch. Most recently, he held the same role with Bank of America (B of A)-Merrill Lynch. Continuing to pursue his career ambitions in the financial industry, he currently resides in Livingston, New Jersey.
Forex Trading Systems
A trained engineer with a long career in the New York and New Jersey financial services industry, Rao Chalasani has held senior management posts with such major corporate institutions as JP Morgan Chase and Merrill Lynch. While working for the financial software firm Sungard Data Systems in New York, NY, in the mid-1990s, Rao Chalasani oversaw the implementation of a forex trading system at Barclays Bank.
Methods of trading currencies on the foreign exchange market, forex trading systems, whether manual or automated, use complex analytics to drive the paired buying and selling of currencies. Factors to consider when designing a forex trading system include ensuring the presence of adequate investment capital, accurately measuring risk-to-reward ratios, and examining the mindset of the trader or traders involved.
When using an automated trading system, traders play a far lesser role than they do when using a manual system. Rather than sitting before a computer to interpret data themselves, they "teach" specialized software to interpret this data for them. Many industry professionals turn to automated trading in order to avoid introducing various human emotional and psychological influences that may lead to poor judgment and to speed up order placement.
A Glimpse at How Credit Derivatives Transfer Credit Risk
A resident of Livingston, New Jersey, Rao Chalasani recently served as business CTO and director of trading risk management at Bank of America-Merrill Lynch in New York, NY. As the former vice president of global derivatives technology at Deutsche Bank, Rao Chalasani developed systems to support the needs of business users involved in credit derivatives transactions.
Credit derivatives consist of privately held two-sided contracts negotiated to reduce one party’s exposure to credit risk. These instruments allow a party to transfer credit risk to a third party while maintaining the underlying asset. The financial value of credit risk is derived from the default risk of the underlying asset.
In modern markets, credit derivatives are used by lenders to safeguard themselves against borrowers carrying significant credit risk. Suppose Company A wants to take a loan from Bank B. Because Company A has a history of poor credit performance, Bank B may be reluctant to give the company the loan. Credit derivatives were formed to mitigate this reluctance. Rather than dismiss Company A, Bank B can require the company to purchase a credit derivative with a third party (counter party), who will agree to reimburse the bank the remaining principal and loan interest if Company A defaults, in exchange for an annual fee. If the borrower does not default, the counter party, usually another lender, will keep the fee as a gain.
Credit derivatives allow lenders to transfer credit risk without transferring the original asset, which is the interest-paying loan. Examples of credit derivatives include credit default swaps, total return swaps, and collateralized debt obligations.
Enterprise Risk Management and Banking
New Jersey resident Rao Chalasani most recently served as the chief technology officer and risk strategist for the New York, NY, office of Bank of America/Merrill Lynch, where he was responsible for technology strategy and the development of a risk management platform. In that capacity, Rao Chalasani invented the patent-pending Enterprise Risk Management System.
Enterprise risk management (ERM) is a methodology that provides an overall picture of a company’s full spectrum of risks. ERM gives companies the ability to understand and control the levels of risk involved in a business strategy. In addition, the methodology helps businesses to articulate the nature and level of risks taken in pursuit of business strategies and enables a system of accountability for the risks and actions taken by the business.
ERM is a significant leap in the way risk management is conducted in the banking industry, covering all areas of business, including governance, compliance, operations, and finances. The changing regulatory environment creates significant risks for banking organizations, and the ERM system helps to give a more structured format to the process of risk management in business procedures.