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New paper provides snapshot of Basel III implementation around the world
FRSGlobal, the financial risk management and regulatory reporting arm of Wolters Kluwer Financial Services, a leading worldwide provider of risk, compliance and audit solutions for the financial services industry, today released a paper entitled “Implementing Basel III – are you ready?”.
The aim of the paper is to provide those tasked with risk management, compliance and regulatory reporting within banks with a current snapshot of how global adoption is progressing to date. The paper also includes a checklist that walks through questions banks should consider in order to be on track with the impending deadlines, including:
• Are you managing the data challenge as well as you could be?
Arguably, the biggest challenge banks face is getting timely and accurate data out of myriad systems in order to get a single view of the enterprise and better manage the bank’s position. Many banks are introducing more automated and robust reconciliation procedures, and centralizing information systems in order to gain the essential transparency demanded by Basel III.
• Have you realigned your business models in accordance with your firm’s risk appetite?
Banks need to de-risk lending activities, ensure they have high quality capital (and more of it), and attain greater short- and long-term liquidity to fund and better withstand stress events in the market. These should all be in line with the firm’s risk appetite.
• Have you standardized reporting and information across all branches?
This is an essential part of the process to help ensure consistent, firm-wide reporting, and needs close attention if it has not already been addressed.
• Have you established realistic but challenging scenarios for stress testing and reverse stress testing?
Stress tests and reverse stress tests need to adequately reflect business lines, with the emphasis on identifying the appropriate stresses, their impact and relevant management actions. This is not only essential for internal purposes, but regulators will also want to see the results.
• Are you truly up-to-date with the latest regulatory developments?
The analysis of regulatory information as it is published is essential to keeping current with Basel III changes and reducing the risk of incorrectly anticipating the regulation.
“The Basel III regime outlines new regulatory standards for banks across the world and its impact has been discussed extensively since its inception in 2010 and then subsequently at every stage of its development,” said Wolfgang Prinz, vice president, Product Management, Wolters Kluwer Financial Services’ FRSGlobal. “Even without having complete knowledge of the full suite and extent of the upcoming wave of regulations and discretional national interpretations, much can be done now to help ensure best practice rollout in coming months and the minimum disruption to the business of banking.”
Wolters Kluwer Financial Services’ FRSGlobal integrated regulatory reporting and risk analytics capabilities form the basis of its comprehensive Basel III solution which covers the elements outlined in the three pillars of Basel III: standardized risk calculation, supervisory review process and public disclosure reporting.