Following the feedback received last week (see 
The introduction of new global liquidity risk management reporting requirements could result in potentially negative unintended consequences such as making it too expensive to lend, according to a group of 150 financial institutions. The comments have been prompted by the publication of the Basel Committee on Banking Supervision (BCBS) recommendations on liquidity risk at the end of last year and the related consultation period, which is due to end this week. A number of global financial institutions have taken the opportunity to provide their feedback on the proposals and indicated that they believe them to be based on incorrect assumptions and potentially very costly for the industry as a whole.
The level of uncertainty in the industry due to the ongoing debate within the regulatory community with regards to new risk management reporting requirements has proved to be both a blessing and a curse to those in the data business. Panellists at this month’s FS Club agreed that the industry is being forced to take data more seriously but there are significant gaps around risk related regulation that may prove to be pitfalls in the near future.
During its most recent firms forum on the subject of liquidity reporting, the UK Financial Services Authority (FSA) confirmed that it is planning a soft launch for liquidity risk reporting on its online regulatory reporting system, Gathering Better Regulatory Information Electronically (Gabriel). As noted by the FSA in January (see 
The UK Financial Services Authority (FSA) has this week been forced to back down somewhat in its aggressive approach to introducing further changes to its liquidity risk regime in light of the current economic climate. As promised last year, the regulator has assessed the state of the market and decided not to push ahead with the quantitative aspects of its regime, namely the controls around liquid asset buffers.
As noted by A-Team Insight last month (see 
Next month, industry practitioners will have four opportunities to provide feedback to the Committee of European Banking Supervisors (CEBS) on its risk related proposals, including those around concentration risk and stress testing. The regulatory body has organised four separate hearings at its London premises to garner feedback on a number of its recent consultation papers, all of which involve technology and systems considerations.
There may be troubles ahead for the UK Financial Services Authority (FSA) with the impending departure of current CEO Hector Sants in the summer, but, in the meantime, the regulator has pledged to support the data vendor community in adapting to the new regulatory order. To this end, the regulator is strengthening its efforts around its independent software vendor (ISV) discussion group, which aims to provide vendors with a forum in which to air their issues.
As part of its drive to compel financial services firms to provide more transparency into their data, the Financial Services Authority (FSA) has confirmed this week that it will require UK firms to publish information on how they handle complaints. According to the regulator, this will help people see how firms are performing in this area and to drive up complaints handling standards across the industry. It will also pose another data challenge for firms already facing new requirements around risk data reporting and single customer view (SCV) reforms (see 
The UK Financial Services Authority (FSA) has indicated that is "disappointed" by the "unclear articulation" of firms’ risk appetites in the Internal Capital Adequacy Assessment Process (ICAAP) submissions it has received from investment firms so far. The regulator indicates that these firms should bear a number of factors in mind when preparing for their next submissions, including providing the right level of risk related data in order to the FSA to be able to accurately judge their risk management capabilities.
Many US firms are taking action to get ready early for the introduction of XBRL tags for financial statements later this year, according to a recent survey by the American Institute of Certified Public Accountants (AICPA) and standards body XBRL US. A total of 73% of the 215 respondents had already begun their testing for the XBRL format in November last year, when the survey was carried out. Moreover, the majority of respondents, at 93%, had at least a basic knowledge of XBRL.
The Committee of European Banking Supervisors (CEBS) was originally established as a forum to lead the charge towards a new Basel framework but in recent years it has become increasingly focused on the practical realities of risk management. Giovanni Carosio, deputy director general of the Bank of Italy who took over the reins as chairman of CEBS last September from Kerstin af Jochnick, recently elaborated on the regulatory body’s changing role and the position it feels the European Banking Association (EBA) should adopt in the building of a new IT infrastructure for regulatory data exchange in Europe.
Last week, the UK Financial Services Authority (FSA) bolstered its campaign to foster greater risk management responsibility within financial institutions with a new consultation paper (to add to the growing mountain) on effective governance standards. This is all part of what the regulator calls its “supervisory enhancement programme”, seemingly aimed at scaring CEOs into compliance with its requirements via the introduction of significant influence functions (SIF) interviews.
Stress testing and its many related data and technology challenges were the talk of this month’s FS Club. Attendees agreed with the motion by chair and JWG-IT CEO PJ Di Giammarino that stress testing is a killer for banks operating in the UK faced with the Financial Services Authority’s (FSA) new liquidity risk reporting regime.
It has been a rough few months for Federal Reserve chairman Ben Bernanke, but it seems that his future at the helm of the US central bank is secure for another four years. Bernanke, who has been an active proponent of mark to market accounting rules, among other things, was re-elected by the Senate to serve another term in office, despite weeks of criticism and uncertainty.
This week the US Securities and Exchange Commission (SEC) has added another set of proposals to its regulatory to do list, this time in the form of new reporting requirements for money market funds. The rules, should they be passed, would require these funds to regularly report their net asset value (NAV) to the regulator, a turnaround from the current situation where these funds are often treated in a similar manner to cash and carry a steady value of US$1 a share. The proposals are likely to prove unpopular with the market as a whole and would entail a data challenge in tracking pricing and valuations data on a monthly basis, as well as impose changes to the way ratings data is used and introduce new stress testing requirements.
Following on from its “Dear CEO” letter sent out earlier this month (see our coverage 
A-Team Insight Events combine A-Team's expertise in financial markets IT with thought leadership from world-class technology innovators and practical experience from financial market practitioners. In 2011, a quality constituency will once again gather for these focused events in London and New York City.
The UK Financial Services Authority (FSA) has this month released its implementation timetable to introduce new reverse stress testing requirements, as promised in its December policy statement: Stress and Scenario Testing PS 09/20 (see here). Firms have until 16 July to submit their implementation plans for compliance with the reverse stress testing requirements to the regulator.
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