Workshop: Basel III

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The Basel II to Basel III challenges

Téléchargez les présentations du Workshop ITbanker 2010

ITBanker2010_basel-iii-pwc.pdf

ITBanker2010_basel-iii-exigo.pdf

The financial crisis has resulted in taking strong and decisive actions in many countries and regions of the world to prevent a similar recession and near meltdown from happening again.The resulting regulatory changes, which in the EU are essentially materialised through various revisions of the Capital Requirements Directive (CRD), will undoubtedly directly impact the IT community. The following is an illustration of where we see IT impacts. CRD II introduces significant changes to the Large Exposures regime. While new reporting aspects are expected in 2012, there are also some very short-term impacts for banks and supporting systems alike in how they identify potential control or economic concentrations between clients. The level of granularity that is expected in such analysis cannot be achieved without adapted supporting IT tools to help identify, measure and report on groups of clients. Next, CRD III will strengthen the capital requirements arising from trading activities, which cannot be met without strong quantitative IT tools given the complexity and frequency of the transactions involved. Disclosure standards are also concerned. If banks do not want to manually reconcile tens of spreadsheets and data sourced from many stakeholders, they will need systems that can link these sources and feed their reports. Last but not least, CRD IV (a.k.a. ‘Basel III’) introduces a series of new capital and liquidity ratios to meet. The latter will have to rely on supporting systems to be able to monitor positions at any time and in changing environment. The above list is not exhaustive and other changes are around the corner too. The workshop will try and make the business and IT worlds understand each other, as we believe that this is critical in developing reliable and adequate software solutions.

Speaker : Thierry López, Basel II Leader, PwC Luxembourg

Thierry has a banking experience of more than 15 years. He is the Basel II Leader, the Risk Management Services Leader, the GRC (Governance, Risk and Compliance) Leader and the Banking Industry Services Driver at PwC Luxembourg. Thierry is coordinating a global offer to banks (GRC, a.o. ICAAP [Basel II framework], market and liquidity risks, ALM, credit and operational risks, but also economic capital and client risk), insurance undertakings, investment funds, operational companies and the Public Sector, a.o. European institutions. Thierry is founding member, honorary chairman and member of the board of PRiM (www.prim.lu), the Association of Risk Management Professionals in Luxembourg, and member of consultative committees for various regulators / lobbies (CSSF, ABBL, ...), a.o. he is representing PwC Global at the Institute of International Finance (IIF) Liquidity Working Group. He is involved in the academic circle and Research as Risk Management Professor at the HEC-Business School of the University of Liège. He wrote articles and well-known books in English with John Wiley & Sons and with De Boeck Université.

And Jean-Philippe Maes, Manager, Risk Management Services and Basel II Expert at PwC Luxembourg.

Jean-Philippe, an engineer by training completed with an MBA from Warwick Business School, is a manager with 4 years' expertise in capital management and Basel II related topics, not only from qualitative and regulatory standpoints but also in highly quantitative aspects. He has audited 25 Luxembourg banks' solvency ratios and associated COREP reports, validated financial risk models and assisted many institutions in implementing all 3 pillars of Basel II. He is now focusing on Basel III and the new Large Exposures regime.

Bale III, concrete impacts.

The success of the implementation of Bale III requirements, as is the case with many other regulation initiatives, lies in the pertinent translation of the different directives into concrete impacts on the operational processes and underlying information system layer. The different capital requirement directives aim to reinforce and improve risk management by introducing more changes compared to the previous accord.

Efficient risk management, as outlined by Bale II and reinforced by Bale III, is combining different dimensions: a perfect knowledge of the business operations, IT systems responsible for data, the relationships with internal (bank managers, CRO, CFO, board) and external (Supervisory body, solution suppliers) stakeholders. In this approach, the bank must raise several challenges to understand what efforts are required to be compliant with the requirements of the directives, in terms of corporate governance, risk analysis, measurement and reporting, stress and back testing.

The workshop will highlight these challenges while describing the responses to be prepared to the coming agenda….

Speaker: Herbert Muck is Business Development Manager at Exigo since three years. He is in charge of supporting exigo’s customers in large scale banking system implementation or migration, by offering a comprehensive set of services combining banking (back to front) and IT expertise. A former certified SWIFT expert and Business Development Manager at IBM SkillTeam, Herbert Muck has built up a strong experience in the main banking operations and subsequent information systems, and has developed over the last ten years a significant knowledge of the implications of financial and regulatory initiatives (SEPA, Target 2, Reporting, Bale II…).

Round Table

Moderated by Anne-Laure Mention, Unit Manager - Innovation Economics & Service Valuation and INNOFinance Program Manager at CRP Henri Tudor

Anne-Laure Mention is in charge of the INNOFinance program within CRP Henri Tudor. Relying on a collaborative approach, the INNOFinance program aims to foster organizational innovation (human, process or ICT-enabled) in the financial industry, in order to support its competitiveness and facilitate its evolution in a globalized environment. Both industry-wide (involving professional associations) and company-specific approaches are used in order to provide tangible outputs such as tools and methods that are of direct applicability to market players. Recent topics investigated include operational risk management and KYC/AML. Finally, this program liaises with international research centres and universities in order to produce science-based knowledge internationally recognized.

She is also in charge of the Innovation Economics & Service Valuation unit, which deals mainly with studies on the determinants of innovation and performance, management control, operational risk management and operational audit, marketing and business modeling studies.

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