Existing templates can be amended more frequently and new templates released with short notice.Īn architecture for both auditability and management reporting At the same time, regulators are investing in dedicated new systems and processes to collect detailed information, which can help them quickly adapt new supervisory requirements.
They will be able to adapt their supervisory requirements and better measure systemic risks. With their stress testing initiative, the regulatory supervisors will collect much more information from banks. For example, banks could implement more effective and transparent fund transfer pricing mechanisms and display more detailed grids for pricing. Banks are implementing the appropriate management reports to fulfill this requirement, which should both reflect risk and inform a business of that risk, enabling them to better appreciate their return compared to a global risk overview. Moreover, institutions are enhancing their processes in order to better spread risk culture across business lines. The same information needs to be sliced and diced according to various dimensions (information should be consistent across all dimensions) and displayed in a distinct technical format (text, CSV, Excel, XML, ASCII, xBRL, etc.) Reports have to be submitted at a higher frequency – and more detailed information has to be submitted on a monthly basis (e.g., the ability to provide liquidity details daily) Reports mix information that is managed across distinct business lines (e.g., finance, accounting, risk, etc.) and systems (e.g., accounting, front office, risk, planning, etc.) Large US banks have to consider the following:Īn increasing number of reports need to be submitted to supervisors – CCAR by itself represents more than 90 FR Y-14 reports CCAR requires financial institutions to adapt their processes and systems to deliver expected results on time. As a result, regulatory reports have become more abundant, granular, and integrated.Īside from Basel III regulations – which ask banks to hold more capital and to demonstrate safe liquidity management practices – supervisory agencies are now defining stricter guidelines for the capital planning and regulatory templates that need to be completed by leading financial institutions. The latest Basel III guidelines, as well as the stress testing and Comprehensive Capital Analysis and Review (CCAR) initiatives taken by the Federal Reserve, illustrate the trend of asking banks to review their risk assessment processes and to disclose much more information. In the aftermath, regulatory supervisors adapted financial regulations and aimed to create rules that better captured the risks embedded within the balance sheets of institutions, as well as to implement sound management practices. The crisis, which started with credit events in the US, triggered systemic funding issues and finally propagated to other continents and industries.
#BUSINESS PROCESS MODELLING CCAR REPORTING DRIVERS#
One of the lessons learned from the last five years is that risk drivers are strongly interrelated.