Algorithmic Contract Types Unified Standards - ACTUS
The Alfred P. Sloan Foundation awarded Stevens a grant to work on the proposal entitled "Creating a standard language for financial contracts and a contract-centric analytical framework". The goal of this project is to build a financial instrument reference database that represents virtually all financial contracts as algorithms that link changes in risk factors (market risk, credit risk, and behavior, etc.) to cash flow obligations of financial contracts. The objective of the project is to develop a set of about 30 unique contract types (CT’s) that represent virtually all existing financial contracts and which generate state contingent cash flows at a high level of precision. We believe, the CTAL project, combined with the successful completion of the FSB LEI effort, will impact every activity related to financial risk assessment: it will significantly improve regulation of individual institutions, monitoring of systemic risk, and enterprise risk management.