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.
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 
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.
In order to assist the European financial services community in its attempts to improve liquidity risk management, the Committee of European Banking Supervisors (CEBS) has published a new consultation paper on how to go about producing an effective allocation mechanism for liquidity costs, benefits and risks, CP36. The recommendations are aimed at providing firms with a framework upon which to build internal pricing mechanisms to price liquidity risk and to align liquidity risk management culture across their organisation via suitable incentives, which are likely to include significant data gathering and technology requirements.
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.
Following the relocation of its head office from Luxembourg to London last year (see 
The Committee of European Banking Supervisors (CEBS) has produced a new set of high level risk management guidelines that stress the need for quantitative risk models to be balanced by a “qualitative approach” and for risk management systems to be revamped to take into account enterprise-wide risk exposure. In order to facilitate a qualitative approach, firms need to invest in their data feeds and systems in order to “explicitly” address macroeconomic environment trends and identify their potential impact on exposures and portfolios.
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.
As part of its endeavour to establish itself as a clearing counterparty (CCP) in the OTC derivatives market, CME Group has this month selected two pricing solutions to support its CCP’s credit default swap (CDS) pricing and intraday risk management services: CMA’s DataVision and Fitch Solutions’ CDS Pricing Service. Anna Mazzone, vice president of product management and marketing at CMA, explains to A-Team Insight how DataVision will support CME Group’s OTC CDS Clearing service.
BNY Mellon Asset Servicing has invested in its client and regulatory reporting systems as a result of valuation and regulatory changes such as FAS 157 and FAS 132R-1, explains Chris Richmond, managing director of global product accounting for the fund administrator, to A-Team Insight. This has involved a significant investment in automating the upload of non-standard pricing sources and the scrubbing of same security prices from multiple sources, he elaborates.
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.
Following SunGard’s upgrade of the technology platform underlying FastVal last year, SunGard has netted its first client of 2010 for the valuations solution in the form of global fund administrator Columbus Avenue Consulting. The firm, which is focused exclusively on the hedge fund market, is the first client to go live on version 3.0 of the platform, says Gavin Lee, chief operating officer of SunGard’s FastVal business unit.
It may have taken a while, but portfolio analytics and data solutions vendor StatPro has finally bagged a client for a global rollout of a software as a service (SaaS) version of its GIPS compliance solution. The vendor upgraded its platform to be enabled to offer its solutions in a SaaS format at the end of 2008 (see our coverage 
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.
A-Team Insight Exchange is a new event series for 2010, which will combine A-Team’s expertise in financial markets IT with thought leadership from world-class technology innovators and practical experience from financial market practitioners.
As noted by A-Team Insight at the start of this year (see our coverage here), the Swiss regulator is closely following behind the UK Financial Services Authority (FSA) in its introduction of a new liquidity risk reporting regime. To this end, the Swiss Financial Market Supervisory Authority (Finma) and the Swiss National Bank (SNB) have confirmed this week that the new regime will enter into force on 30 June 2010.
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