Risk Management

Understanding capital requirements in the light of Basel IV

8 important ways in which the industry uses the method The following are the main areas where the industry already uses the 2012 method of IRB in the light of Basel IV. Establishment of a fair dialogue with supervisory authorities on portfolio risk versus required capital levels The PIT-ness method explains the change in PD …

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New attitudes to liquidity risk management

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 …

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CECL: Are US banks ready?

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, …

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Scenario stress test: In addition to compliance with the law

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 …

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RegCap vs. E-Cap: Getting it right

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 …

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