23 Jul Preparing for OSFI Basel IV Regulation Changes – PRMIA Webinar
As the November 1, 2022 deadline approaches many financial institutions are left wondering how they will prepare for Basel IV implementation. In addition to the Basel IV reporting updates, OSFI released the final draft of its BCAR changes for capital, leverage, and liquidity requirements such as:
- Double the number of BCAR schedules (specifically the capital adequacy regulatory reports) from 46 to 82.
- New and refined asset classes requiring detailed exposure information for reporting and associated calculations.
- New calculations for operational risk. New Standardized Approach and Simplified Standard Approach for qualifying non-DSIBs and SMSBs.
The banking industry faces a slew of changes and new requirements, but not a lot of time for implementation.
As one of the panelists mentioned, with Basel IV reforms, come changes from all sides of the risk spectrum: credit, market, and operational. The changes as well as the resulting complexities could force some institutions to reevaluate the strength of their regulatory compliance regimes.
In addition to the number of changes and updates, there is a significant increase in the level of granularity required, including for 10 years’ worth of historical loss data inputs from banks. Financial institutions must be able to seamlessly access information from multiple data sources across their institutions, run complex new calculations and automate the reporting process. Without a fully integrated end-to-end solution banks will have a difficult time complying with the new Basel IV changes.
During the webinar, the panelists explored the new face of Basel IV, uncovering the difficulties that financial institutions might encounter and how best to address them to ensure proper Basel IV implementation and compliance.
Anh Chu, Partner, FSRM practice lead Canada and Global FS risk technology, alliance, innovation lead, AxiomSL
Sarah Reppchen, Co-Regional Director PRMIA Vancouver and Leader, Financial Services Risk Advisory, Deloitte