Extracting Value from Risk Management
Posted: 19 September 2007 | Source: Teradata
Through fiscal year 2006, financial institutions aiming for the advanced levels of compliance with the new Basel II Capital Accord, will ‘go live’ with a parallel run of new and old risk systems. This parallel run will be
12-24 months in duration and is designed to ensure no issues or problems exist before those same institutions switch to their new Basel II compliant risk management systems at the beginning of FY 2008.
The realization that Basel II is the beginning of a new way of doing things, and that optimal risk management requires users and processes to have access to the correct data in the best way, is making the boards of some banks take a deeper, broader look at their approach to handling the Basel II Accord. There are a number of contributing factors to banks’ concerns about this and other new regulatory changes which are imminent. Basel II is not
simply providing banks with options as to how their capital requirements are calculated. This would be a fairly simple undertaking that could require some modifications to current applications including sourcing some new types of data.
Integrating Risk Management with Core Banking Processes is a Primary Objective of Basel II