RISK MANAGEMENT INSIGHTS
Better risk management for competitive advantage
Recent risk management articles
- Risk data infrastructure: Staying afloat on the regulatory floodWhat are the challenges of a risk data infrastructure and how can they be addressed? Here's what you need to know to build an effective enterprise risk and finance reporting warehouse that will effectively address compliance requirements.
- Are you good at scoring?Credit scoring is the foundation for evaluating clients who apply for a loan (or other types of exposure for the bank). It is not unusual for it to take up to 12 months to build and deploy a new credit scoring model. Reforming the process will help minimize losses, increase earnings and reduce operational risk.
- Understanding capital requirements in light of Basel IVMany financial firms are already using a popular 2012 PIT-ness methodology for internal ratings-based models. This article examines eight ways the industry is successfully using the methodology – and why this approach can bring synergies for banks, value for regulators, and major competitive advantages.
- IFRS 9 and CECL: The challenges of loss accounting standardsThe loss accounting standards, CECL and IFRS 9, change how credit losses are recognized and reported by financial institutions. Although there are key differences in the standards for CECL (US) and IFRS 9 (international), both require a more forward-looking approach to credit loss estimation.
- CECL: Are US banks and credit unions ready?CECL, current expected credit loss, is an accounting standard that requires US banking institutions and credit unions to estimate life-of-loan losses at origination or purchase.
- Beyond IFRS 17 – what's next?IFRS 17 is not just a new accounting standard. Its fundamental objective is to provide transparency and insight to the insurance business while identifying strengths and areas for improvement. Learn how to keep a long-term vision and achieve broader business value beyond the immediate demands of IFRS 17.
- Understanding capital requirementsCredit risk classification systems have been in use for a long time, and with the advent of Basel II, those systems became the basis for banks’ capital adequacy calculations. What is needed going forward is an efficient and honest dialogue between regulators and investors on capitalization.
- IFRS 17: Waiting is not an optionIFRS 17 is a principles-based accounting standard for the future-oriented valuation of insurance contracts. Designed to increase financial transparency, IFRS 17 requires insurers to report in more detail on how insurance and reinsurance contracts affect their finances and risk.
- Scenario stress testing: Beyond regulatory complianceScenario stress testing offers banks a way to simulate responses to a financial crisis using a wide range of conditions and levels of severity.
- The analytical CRO and the risk aware CFOTo create a more risk-aware organization, the most important collaborative relationship for the CRO is with the CFO and the finance team. The CFO and CRO – as the executives responsible for budgeting and supervision – tend to get caught in the middle of competing objectives.
- frtb: a wait and see strategy could be riskyFRTB, fundamental review of the trading book, is a regulation that changes how banks analyze market risk in the trading book to address systemic challenges.
- IFRS 17 and Solvency II: Insurance regulation meets insurance accounting standardsIFRS and Solvency II encourage comparability and transparency from a regulatory and accounting perspective for insurers, but there are important differences.
- Credit risk management is the answerLending and loan volume is back up to pre-crisis levels. But banks are facing higher delinquencies as well. That's why improving credit risk management is crucial.
- New attitudes for liquidity risk managementRecent liquidity risk shocks and regulatory pressures have highlighted the need for agile liquidity risk management and planning systems. To manage liquidity risk more strategically, banks will need the right strategy, solution architecture and IT systems – plus governance to manage the process.
- Model risk management: Vital to regulatory and business sustainabilitySloppy model risk management can lead to failure to gain regulatory approval for capital plans, financial loss, damage to a bank's reputation and loss of shareholder value. Learn how to improve model risk management by establishing controls and guidelines to measure and address model risk at every stage of the life cycle.
- Should banks adopt regulations as best practices?The regulatory tsunami isn't letting up, but is there value to be gained in adopting, for instance, BCBS 239 principles?
- Retail cyber risk toleranceManage your data assets just as you would any of your physical assets by putting security plans in place for any and all contingencies.
- Risk data aggregation: Transparency, controls and governance are needed for data quality and reportingFinancial institutions’ data aggregation and reporting techniques and systems are receiving increased attention both internally and externally. Find out how to take a comprehensive approach to BCBS principles and risk data aggregation and management.
- RegCap vs. E-Cap: Getting It rightStress tests don’t produce a fourth type of capital - it is regulatory capital. And it gives regulators a view into capital planning where they had none before.
- Five myths and misconceptions community banks have about Basel IIIMyth No. 1: Basel II didn't pertain to us, so Basel III won't either. Wrong. The US Basel III Final Rule provides capital frameworks commensurate with bank size, so the rules apply to nearly all banks in the US. Myths 2-5...
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