Leveraging its risk management and systems expertise, First Chicago NBD is extending its derivatives business in Asia by forming a joint venture with Tokio Marine & Fire Insurance Co. Ltd., effectively growing its derivatives business by tapping the Japanese insurer's customer base.

The venture enables Tokio Marine to immediately expand its product offering into securities- which was off limits until recent deregulation- without making the necessary investments to build systems to support an independent derivatives business. "The derivatives business is a relatively expensive business to get into," says Barry Sabloff, svp and head of global risk management for First Chicago, "because you need the pricing models, the back-office systems. All of that systems and technology (investment), we bring to the table, and we will supply in the joint venture."

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