In line with its partnership approach to the market, international financial reporting standards (IFRS) and risk management solution vendor Fernbach Software has launched a strategic initiative with HP and Intel to target the liquidity risk management space. Mike Hamm, managing director of the vendor, explains to A-Team Insight that the firms have been working on the launch since January and are aiming to provide an easy to use and quick to deploy technology platform for both stress testing and risk data reporting to those under the FSA’s jurisdiction and beyond.
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.
Following the relocation of its head office from Luxembourg to London last year (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.
There is a clear need within the counterparty risk manager community for more tools and better access to data related to credit risk analytics, according to Jonathan Di Giambattista, managing director of risk and performance analytics at Fitch Solutions. Di Giambattista bases his judgement on a recent survey of 85 counterparty risk managers in buy side firms carried out in October last year by the solutions provider owned by ratings giant Fitch.
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.
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.
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 
In a similar vein to the G20 talks throughout the course of last year, Shyamala Gopinath, deputy governor of the Reserve Bank of India, has this month been discussing regulatory reforms aimed at reducing the risk around OTC markets via greater transparency and introducing new liquidity risk reporting measures. Gopinath is keen for the country to begin work on tackling the “key elements” for reform, she explained to a gathering of the Fixed Income Money Markets and Derivatives Association - Primary Dealers Association of India at the start of January.
Following the decision of the Securities and Exchange Commission (SEC) to crack down on electronic trading practices this month (see our coverage 
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This week, the UK Financial Services Authority (FSA) has issued yet more details about the data required for the next stages of its liquidity risk reporting regime. In addition to the work going on around helping firms to get ready to report to its Gabriel system (see here), the regulator has provided details on how firms should calculate the time buckets on FSA048 and therefore how firms should allocate daily cash flows between the columns of FSA047 and FSA048.
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