Derivatives benchmark and multi-asset front office and revaluation provider SuperDerivatives (SD) has launched the next generation of its interest rates derivatives trading system to support demand for tools to distribute and manage interest rate derivatives.

SD said that volatility in the interest rates market, driven by policy-setters and central banks adapting their base rates to the changing economic landscape, had combined with high levels of illiquidity in banking systems to create uncertainty in pricing for even the most vanilla of interest rates derivatives.

Deep concerns about the liquidity and viability of the world's banking system mean challenges for institutions seeking to hedge interest rates exposures on their books. Some banks and funds are now struggling to build consistent yield curves as a result of illiquidity and subsequent difficulty in pricing short-term interest rates and basis swaps.

SD's Interest Rates Next Generation was developed following feedback from hundreds of clients, as well as managers of interest rates derivatives trading and sales desks, corporate treasurers and risk managers.

Users can now trade high margin, tailored sophisticated structures - as easily and efficiently as plain vanilla products. As is the case with all SD solutions, Interest Rates Next Generation is web-based and operates in real time for immediate implementation and scalability, with connectivity to over 10 years of historical database for analysis.

Mark Wightman, vice-president sales Asia at SD, said: "The interest rates derivatives technology at banks has not improved significantly in the past few years and derivatives prices have remained relatively opaque.

"SD Interest Rates Next Generation enables both the sell- and buy-side improve efficiency and productivity, and introduces unparalleled price transparency, which is crucial in this environment.

"Low short-term rates and steep yield curves are driving trade in interest rate derivatives, but institutions need the tools to adapt to the current levels of volatility. SD solves this problem very efficiently."