There are several key areas that banks should consider when solving their liquidity risk optimization challenges. To effectively manage liquidity risk, banks need the right strategy, solution architecture and IT systems – plus management to manage the process. Banks can use the same investment to simultaneously strengthen their risk management systems and further realize business …
Experiences from IFRS 9 To put these CECL challenges in perspective, it may be helpful to look at what happened outside the United States. In the rest of the world, IFRS 9 is the global standard issued by the International Accounting Standards Board to tackle expected credit statements. It was completed and published in 2014, …
The well-choreographed steps to compliance Scenario stress testing has evolved as a tool for banking supervision after the recent financial crisis, and financial institutions have since incorporated these regulatory exercises into their business as usual. The exercises usually start on a pre-planned date with the release of a known number of supervision scenarios and a …
Scenario stress test: In addition to compliance with the law Read More »
The sky is the limit – how quality data and advanced analysis support your business IFRS 17 is about recognizing profits during the insurance policy based on new profit patterns related to policyholders’ services. In an ideal world, the expected release of contractual service margin (CSM) would be the same as the actual release of …
The US Basel III final rule marks the first time that the US regulatory system has been adapted to the size of the bank. Learn about the history of Basel III and what institutions are affected today. Source link
Myth # 1: Basel II didn’t concern us, so Basel III won’t either. Wrong. The US Basel III final rule provides capital ratios that correspond to bank size, so the rules apply to almost every bank in the United States. Myths 2-5 … Source link
Basel III is not going away. An investment now rather than later in a tool that gives you repetitive processes – and automatically updates as the rules change – will be worth your time and effort. Source link
Stress testing gives regulators a view of capital planning Risk research and quantitative solutions In one of our earlier articles for risk insights (see Venture capital and lessons from Titanic), we explain financial (or venture capital) compared to regulatory capital (RegCap) and available capital or capital available. In this article, we plan to take a …
Banks will need to update ECL amounts at each reporting date for changes in credit risk, which significantly increases impairment calculations and data collection. Source link
Model risk is inevitable The problem is, models per Definition is simplifications of reality. As British mathematician George E.P. Box pointed out, “Essentially, all models are wrong, but some are useful.” The risk of model-supported decisions is divided into two areas: Does the model provide inaccurate output? Is the model abused? This can be a …
The banks have to pilot themselves through the model launch Read More »
