A Perfect Perfecta: For Risk Monitoring And FRTB Implementation, Pick The Winner At Post Time

Financial institutions may be facing higher capital requirements based on the Basel Committee on Banking Supervision (BCBS) changes to FRTB. The deadline for new FRTB implementation is 2023. And certain jurisdictions must report even sooner, for example under Capital Requirements Regulation 2 (CRR2). New FRTB reporting requirements affect how firms measure their market-risk capital charge and achieve consistency with other critical calculations including the standardized approach for counterparty credit risk (SA-CCR) and credit valuation adjustment (CVA).

Together these elements will alter organizations’ capital requirements and being ready for post time will require preparation across several areas of an institution.

Winning The Perfecta: Large Volumes And Preparing For The Future

Effective FRTB implementation means that institutions must step up their processes for FRTB, SA-CCR, and CVA calculations and ensure transparency and granularity in their data analysis. To accommodate new regulatory requirements and develop an effective means of assessing risk, institutions should consider the following:

  • Analyzing large trade volumes – will necessitate sophisticated tools that (ideally) operate in the cloud and SaaS-enabled solutions
  • Being ready for current and future calculations – will necessitate a platform and solutions that seamlessly operate across jurisdictions and timelines

As we know, correctly picking a Perfecta in a horse race is a gamble. But for FRTB implementation you can improve your odds immensely.

Galloping The Distance: Good Partnerships Win Races, Even The Perfecta

Institutions need a solution that will gallop onto the backstretch with the requisite speed and power and guide them through the challenges of a crowded race day field and to the finish line in style.

Complete the form below to read our in-depth article on developing a holistic risk ecosystem to handle FRTB implementation and Basel IV requirements. Contact us to discuss your needs.

We invite you to read other recent and insightful pieces on Basel IV and CRR2:

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