03 Jun 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:
- Revised Capital Requirements Regulation Rules: CRR2 Reforms And Beyond In The Age Of COVID-19
- Act Four – Evolving Stress Testing Scenarios in 2021: What Happens At the End Of Swan Lake?
- Basel IV FRTB Changes Leave Financial Institutions Asking: How Do You Spell Difficult? F-R-T-B
- AxiomSL the front runner in corroborating FRTB calculations with ISDA benchmarking to meet industry regulatory requirements