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eFrame® for Banking Basel III Stress Testing
eFrame® for Banking Basel III Stress Testing
eFrame® for Banking Basel III Stress Testing
eFrame® for Banking Basel III Stress Testing
eFrame® for Banking Basel III Stress Testing
eFrame® for Banking Basel III Stress Testing
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eFrame® for Banking Basel III Stress Testing

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Much of the challenge around Stress Testing is efficiently industrialising what are effectively a series of one-off, deep dive and analytic exercises. With this solution, banks can instigate an …

Much of the challenge around Stress Testing is efficiently industrialising what are effectively a series of one-off, deep dive and analytic exercises. With this solution, banks can instigate an enterprise-wide business-as-usual regime around

Stress Testing and benefit not only from less complexity when their regulatory supervisor decides to assess medium term capital positions but also gain the ability to include Stress Test insights into the tactical and strategic management of the business.

Would you like to know more about Basel III Stress Testing solutions? click here: http://www.secondfloor.com/solution/eframe-for-banking-basel-iii-stress-testing

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  • 1. eFrame®for Banking Basel IIIStress TestingOne-Click Stress Testing for Basel III Compliance www.secondfloor.com
  • 2. eFrame®for Banking Basel IIIStress TestingOne-Click Stress Testing for Basel III Compliance
  • 3. The importance of Stress testing challenges stress testing However, implementing a standardised stress testing process Stress testing is becoming an across a large and diverse bankingincreasingly important risk management tool in organisation is easier said than done. In reality,the banking industry and a critical capability for banks come up against several major challengesBasel III compliance. A comprehensive stress when trying to conduct a comprehensive stresstest can reveal the resilience of organisations, test, including:business units and portfolios towards potentialcrisis – and uncover areas for action and • Business complexity – a typical largeimprovement. bank will deal in many different products, portfolios and asset classes, with heavily siloedIt’s also an increasingly important exercise for approaches to risk. The assumptions andregulatory supervisors who need to monitor calculations applied in one area during a stressthe strength of the banking system as a whole. test may not be the same as those applied toThe European Banking Authority is requesting another, making it difficult to get an accurate,stress testing reports on a more regular basis, overall view of risk exposureputting pressure on banks to ensure they havea robust, well-documented and organisation- • Manual effort – a huge amount of time andwide stress testing infrastructure in place. effort is spent in locating, collecting, validating and reconciling the relevant data, taking valuable resources away from the business • IT costs – the cost of implementing some technological solutions for data aggregation, analysis and reporting, eFrame® offers major benefits such as a firm-wide data warehouse or GRC to banking institutions looking suite, can be significant to standardise and automate • Repeatability stress testing for improved – the production of a stress test report regulatory compliance and tends to be a manual, a more strategic approach ad-hoc effort, with no automated process for to risk management. ensuring it is done the same way every time – making it hard to assess the cumulative effect of risk management adjustments • Data quality and integrity – when data and calculations are being consolidated from multiple business units and legal entities, there’s poor insight into where the data came from or who signed it off, undermining management confidence in its quality and integrity
  • 4. A dedicated framework for • Transparent incorporation of existing risk models, avoiding the cost and effort group-wide stress testing associated with developing new or stress Key features of eFrame® for Banking test-specific risk modelsBasel III Stress Testing include: • Comprehensive workflow and approval • A single framework to orchestrate stress process ensuring that all data and calculations testing across multiple hierarchies, supervisory are submitted and validated by the correct, jurisdictions, legal entities, business units, designated individuals, and within the report products, portfolios and asset classes deadline • Automation, reducing the time and effort • A full audit trail of all the data, calculations needed to run a stress test, validate the results and individual actions contributing to the final and consolidate them into a single report for stress test report the regulator or senior management • A standardised, automated, documented • A repeatable process enabling the test and auditable process for firm-wide stress to be re-run at any time using the same testing, producing accurate reports that assumptions tand scenarios, allowing the regulators and senior management can trust impact of risk adjustments to be accurately assessed Benefits • A standardised approach that incorporates eFrame® for Banking Basel III Stress Testing is a a standard definition of processes and software solution that creates a single platform procedures, which enables financial institutions for firm-wide stress test reporting. In doing so, it to apply a sound stress testing methodology enables an orchestrated, repeatable approach to across the business stress testing at solo and group level, providing firm-wide confidence in the face of complexity. • Encompasses all types of risk exposure (Credit Risk, Market Risk, Liquidity, etc.), With eFrame®, risk executives can quickly the standard definitions will be aligned with implement and enforce a firm-wide process a firm’s existing methodologies and systems and framework for automated, auditable and by SecondFloor’s expert consultants consistent stress tests. Capital requirement Consolidation Capital calculation Calculators Stress Test Actuals vs Appetite Scenarios /Risk factors Capital Model parameters Liquidity Narratives eFrame® Reporting For Banking Data Basel III Corep Stress Testing Counterparty ratings Finrep Assets & Liabilities Other TIME WINDOW PROCESS DRIVEN CONTROL & REPORTING AUDITABILITY Collaterals & Exposures Operational losses eFrame® creates a Financial data firm-wide platform for Data Calculators Value at Risk regular stress testing Liquidity ratios at the click of a mouse. Expected loss = PD x LGD x EAD
  • 5. One-Click Stress TestingOnce implemented, firm-wide stress tests can Key featuresbe run in eFrame® with just one click – ratherthan spending hours or days collecting, collating • owerful reporting solution for assessing P portfolio developments under stressand reconciling individual reports. • ensitivity analysis and calibration SDataflow Visualisation functionalityWith Analyzer, an optional eFrame® accelerator, • Integration with existing IT systemsfirms can improve governance, auditability andBasel III compliance by visualising the flow ofstress test data from its source to the final report,and also mapping all the systems and processesinvolved. This can provide a valuable ‘as-is’ viewfor those looking to make a start on improvingthe way stress tests are managed. Key benefits Powerful Reporting Capabilities • ignificantly reduce the time, cost and effort S eFrame offers three styles of ® to answer internal and regulatory requests reporting that help firms meet • Reports that senior management can rely on regulatory and management requestsfor stress testing: • ccelerate and strengthen Basel III A compliance • Standard reports: eFrame® comes with a suite of standard, out-of-the-box reports, based • Fully traceable and auditable on common internal and external requirements • Custom reports: SecondFloor consultants can implement additional custom reports • Ad-hoc reporting: eFrame® enables users Solution implementations to run ad-hoc queries against the underlying SecondFloor consultants follow a standard data to meet one-off information requests process when implementing eFrame®, so you know upfront how long the project will take,Auditability what it will involve, and how much it will cost.Every eFrame® implementation includes data Contact us on info@secondfloor.com to requesthistorization, backtesting, and full audit trails a personal demo or to discuss your particularas standard. requirements.Works with existing systems Find out moreeFrame® works with a firm’s existing IT To learn more about how eFrame® can helpenvironment, including risk models and introduce an efficient, repeatable, firm-widecalculation systems, integrating data from process for stress test reporting,multiple sources to create an enterprise-wide contact us on +31 88 26 35 463platform for stress test reporting. It doesn’t email us at info@secondfloor.comreplace any existing systems, so it can beimplemented without disrupting business. or visit our website at www.secondfloor.com
  • 6. For more details please contactSecondFloor.About SecondFloorSecondFloor helps firms to complyand produce regulatory informationefficiently, consistently. Companiesthat turn to SecondFloor’ solutionsbenefit from timely, complete, accurate,traceable, auditable and repeatablereports and analytics. Facilitating stresstesting, economic capital calculations,and regulatory reporting in complexenvironments are key elements ofSecondFloor’s credentials that haveestablished it as a successful enablerof business analytics. eFrame®,SecondFloor’s software application,reflects best practice approaches andproject accelerators learned with clientsduring years of experience. SecondFlooris also an IBM risk analytics reseller.Request a full demonstrationWould you like to have a personalizeddemonstration of the eFrame® forBanking Basel III Stress Testing solution?Please contact us atinfo@secondfloor.com or simply visitwww.secondfloor.com

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