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Given the recent financial crisis and the extended impact on global credit market and liquidity, it is imperative that financial institutions strengthen their market risk management capabilities to effectively meet compelling business objectives and challenges which include portfolio pricing and portfolio exposure management
Assessing a bankโs culture is not an easy task, but there clearly is an increased emphasis on culture that is part of the regulators' broader focus on โheightened standards.โ Learn what it takes to have a strong credit culture. Read about these 10 credit culture factors to assess your institution's credit culture.
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IBMโs integrated risk management solutions enable financial institutions to: Understand market and credit risk exposure across multiple silos to make financial and risk decisions consistent with business objectives; Secure all transactions and forms of interaction; proactively prevent increasingly sophisticated internal and external prohibited activities and effectively manage detected events; Proactively manage potential risks from events impacting operations, processes and applications - both from internal & external and business & IT; Understand and manage compliance across a dynamic set of voluntary and mandatory requirements imposed by multiple regulatory bodies, across operating jurisdictions, at an optimal cost for value.
โBasel III is more about improving the risk management systems in the Banks than just Improved Quality and enhanced Quantity of capitalโ. Please discuss the challenges to the Indian Banks by March,2017
How to Coordinate Regulation (Basel III), Market and Business Strategy in the...AIS
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AIS-GARP Madrid chapter 2013 - Optimize or die: How to Coordinate Regulation (Basel III), Market and Business Strategy in the Planning of a Financial Institution
(1) Diversified Funding: Problems with Steering Towards Long-Term Stable Funding; (2) Analysing the Best Internal Mechanism for Managing new Liquidity Requirements
Rethinking Reconciliation: How a Global Center of Excellence Can Enhance Risk...Broadridge
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In two years, outsourced reconciliation solutions have grown exponentially as increased focus on risk, regulations, and cost reduction has heightened the need for greater transparency and efficiency across all areas of financial services operations. Discover how leading financial institutions are enhancing risk management and reducing costs through a global center of excellence for reconciliations.
Given the recent financial crisis and the extended impact on global credit market and liquidity, it is imperative that financial institutions strengthen their market risk management capabilities to effectively meet compelling business objectives and challenges which include portfolio pricing and portfolio exposure management
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Financial Risk Management: Integrated Solutions to Help Financial Institution...IBM Banking
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IBMโs integrated risk management solutions enable financial institutions to: Understand market and credit risk exposure across multiple silos to make financial and risk decisions consistent with business objectives; Secure all transactions and forms of interaction; proactively prevent increasingly sophisticated internal and external prohibited activities and effectively manage detected events; Proactively manage potential risks from events impacting operations, processes and applications - both from internal & external and business & IT; Understand and manage compliance across a dynamic set of voluntary and mandatory requirements imposed by multiple regulatory bodies, across operating jurisdictions, at an optimal cost for value.
โBasel III is more about improving the risk management systems in the Banks than just Improved Quality and enhanced Quantity of capitalโ. Please discuss the challenges to the Indian Banks by March,2017
How to Coordinate Regulation (Basel III), Market and Business Strategy in the...AIS
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AIS-GARP Madrid chapter 2013 - Optimize or die: How to Coordinate Regulation (Basel III), Market and Business Strategy in the Planning of a Financial Institution
(1) Diversified Funding: Problems with Steering Towards Long-Term Stable Funding; (2) Analysing the Best Internal Mechanism for Managing new Liquidity Requirements
Basel iii Compliance Professionals Association (BiiiCPA) - Part ACompliance LLC
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Certified Basel iii Professional (CBiiiPro)
Objectives: The seminar has been designed to provide with the knowledge and skills needed to understand the new Basel III framework and to work in Basel III Projects.
Target Audience: This course is intended for managers and professionals working in Banks, Financial Organizations, Financial Groups and Financial Conglomerates who need to understand the new Basel III requirements, challenges and opportunities. It is also intended for management consultants, vendors, suppliers and service providers working for financial organizations.
This course is highly recommended for:
- Managers and Professionals involved in Basel III (decision making and implementation)
- Risk and Compliance Officers
- Auditors
- IT Professionals
- Strategic Planners
- Analysts
- Legal Counsels
- Process Owners
Basel III, albeit delayed, is set to change the banking landscape. More capital and greater liquidity will change the way banks do business in the future. More interestingly, Basel III could well lead a change in the financial services landscape globally. A "Shadow Banking Sector" is already a reality and Basel III opens up significant opportunities for capital rich emerging market banks.
This is a first in a series of presentations exploring Basel III, its impact on the global banking sector and most importantly possible response strategies banks could adopt to gain competitive advantage.
This presentation is the one stop point to learn about Basel Norms in the Banking
This is the most comprehensive presentation on Risk Management in Banks and Basel Norms. It presents in details the evolution of Basel Norms right form Pre Basel area till implementation of Basel III in 2019 along with factors and reason for shifting of Basel I to II and finally to III.
Links to Video's in the presentation
Risk Management in Banks
https://www.youtube.com/watch?v=fZ5_V4RW5pE
Tier 1 Capital
http://www.investopedia.com/terms/t/tier1capital.asp
Tier 2 Capital
http://www.investopedia.com/terms/t/tier2capital.asp
Basel I
http://www.investopedia.com/terms/b/basel_i.asp
Capital Adequacy Ratio
http://www.investopedia.com/terms/c/capitaladequacyratio.asp
Basel II
http://www.investopedia.com/video/play/what-basel-ii/?header_alt=c
Basel III
http://www.investopedia.com/terms/b/basell-iii.asp
RBI Governor - Raghuram G Rajan on the importance if Basel III regulations
https://youtu.be/EN27ZRe_28A
Changes to Basel Regulation Post 2008 CrisisIshan Jain
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Subprime crisis
Basel Committee objectives and history
Pillars of Basel 2 and Basel 3
Basel 3 Capital Requirements
capital Rations
Capital Buffers
Leverage Ratios
Global Liquidity Standards
macroeconomic factors
Value at Risk
Expected Shortfall
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In the last few years, the financial markets have undergone dramatic change. While some of this is down to natural evolution, much of the change can be directly attributed to new rules introduced in the wake of the 2007 crisis. Regulators, legislators and central bank governors have been determined to avert another bubble bursting or an unexpected event that could threaten markets. Lawmakers have targeted key financial practices for reform, radically altering the expectations and behavior of industry participants. The combination of the Dodd-Frank Act, European Markets Infrastructure Regulation (EMIR), MiFID ll and Basel lll signify the biggest regulatory change in decades. These reforms have resulted in major change to how financial products are traded, settled, collateralized and reported, resulting in deep and ongoing structural changes to the markets.
There is no doubt that these new rules are directly impacting buy-side firms โ be they asset managers, hedge funds, insurance companies or pension funds. But while the changes have certainly brought challenges, they have also brought opportunities. Firms that can proactively evaluate structural and operational dislocations in the marketplace and tailor business models to leverage the opportunities while addressing the challenges will be in the best position to stand apart from their competitors. Revised business models call for revisions to supporting processes and systems. Buy-side firms should look to re-architect their processes and technology infrastructure, with a goal to strengthen risk control and oversight, enhance transparency and improve efficiency of front-to-back office control functions.
The credit crisis, and the regulatory response it spawned have fundamentally reshaped financial markets for buy-side firms. But while the changes have brought about challenges, they have also ushered in opportunities. The key to success will be the speed with which firms are able to understand the changing marketplace and adapt their business models to align with the changes.
The impact of Basel III, also known as The Third Basel Accord, will vary by geography -- from potentially slowing down economies in emerging nations, to protecting the European Union from financial collapse, to increasing capital adequacy and improving risk management. Given the framework and timeline for implementing Basel III, the burden falls on national regulators to translate the international guidelines into national policies that suit and stabilize their economic environment and support economic growth.
BCBS 239 Compliance: A Comprehensive ApproachCognizant
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In 2013, the Basel Committee on Banking Supervision (BCBS) issued 14 principles for effectively aggregating risk data and reporting, with the goal of enabling banks to understand and address risk exposures that influence their major decisions. While Global Systemically Important Banks (GSIBs) have made progress in complying with BCBS 239, Domestic Systemically Important Banks (DSIBs) are still in the early stages.
Basel III Mortgages: Australia - Key Themes and Strategic Approachaccenture
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The point of view explores the new Basel III reforms and the significant impact they will have on data and systems in Australia. The piece offers a strategic approach to Basel III Mortgages and outlines five key questions Australiaโs banks need to ask as they prepare for additional regulatory obligations.
Accenture 2015 Global Structural Reform Studyaccenture
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Accentureโs 2015 Global Structural Reform Study โ based on a survey of 131 banking, insurance and capital markets institutions across regions โ confirms that, while institutions are investing in their response to Global Structural Reform (GSR), their plans still appear focused on meeting regulatory demands alone, rather than accounting for the more strategic implications of structural reform.
Highlights from the study's conclusions include:
- GSR is re-writing the financial services landscape
- Investment is clear, but strategy less so
- Three suggested principles for unlocking the potential of GSR
Download the report and visit https://www.accenture.com/accenture-2015-global-structural-reform-study.aspx to learn more.
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Memorandum Of Association Constitution of Company.pptseri bangash
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www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
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Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
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Basel III Is Here - What are the implications for your business?
1. View Point
Basel III Is Here
Introduced to strengthen the banking system, Basel III regulations
require greater cooperation and transparency from financial institutions
What are the implications for your business?
Amit Patni, CFA, FRM
Abstract
This article focuses on the key requirements of the Basel III proposals. It highlights
key issues uncovered during the financial crisis, delineates measures introduced to
prevent the repeat of the issues, and outlines the impact on the financial industry
and larger economy on the whole. The paper then takes a deep-dive into the
impact of the new regulations on data and technology systems and the challenges
firms face in re-engineering their data and IT systems. Finally, it offers a solution
to these challenges.
Infosys โ View Point | 1
2. An extensive effort is underway to strengthen the financial sector and make banks
and other institutions more resilient in the face of unexpected stress. The hope is that
Basel III
any future crisis will not lead to governments again being forced to spend billions
of dollars of taxpayerโs money to save the banking system. Regulatory requirements
Is Here included in the Basel III proposals have been introduced to help facilitate this
overhaul. Nonetheless, much is still being debated in the industry. Regulators are
moving across unknown ground as the industry comes to grips with the difficulties
of assessing the potential outcomes of the new regulations.
Basel III Impact Overview
Basel III is a paradigm shift that is rapidly changing risk management practices, the regulatory landscape, and
capital adequacy principles for the financial industry. Broadly speaking, Basel III will have a significant impact
on three key areas:
Business Practices โข Capital Management โข Financial Disclosure
โข Liquidity Management โข Leverage Ratios
โข New Data Requirements โข Data Accessibility
โข Data Integration โข Data Analysis
Technology &
โข Advanced Analytics โข Risk Management
Systems โข Reconciliation Systems โข Communications
2 | Infosys โ View Point
3. The new regulations aim to strengthen the global financial system by implementing initiatives
designed to:
โข Strengthen bank-level, or micro-prudential regulations, which will help raise the
resilience of individual banking institutions during periods of stress.
โข Strengthen system-wide, or macro-prudential regulations, addressing risks that can
build up across the banking sector and broader economies because of the cyclical
nature and interconnectedness of the global financial industry.
โข Strengthen global quality and quantity capital rules with the goal of promoting a more
Basel III resilient banking sector.
Goals โข Strengthen short- and long-term liquidity coverage and balance sheet funding for the
global banking system.
โข Constrain excess leverage in the banking system by introducing a leverage ratio
requirement as a backstop measure to risk-based capital rules.
โข Reduce interconnectedness and cyclical gyrations to prevent the risk of spillover from
the financial sector to the wider economy while addressing the lessons learned from
the financial crisis. This includes introducing counter-cyclical capital, contingent
convertible capital, and โsystemically important financial institutionsโ akin to โtoo-
big-to-failโ provisions.
โข Improve risk coverage and expand disclosure requirements for the banking system.
This includes introducing better counterparty credit risk measures with stressed
conditions, better risk weights for central counterparty use, and enhanced counterparty
valuation adjustment requirements.
Implications for Management of Data, Technology and Operations
Financial industry players will likely incur higher regulatory compliance costs as they try to decipher and implement a multitude of
Basel III rules issued by regulatory bodies. Basel III impacts all areas of the firm and requires a holistic-approach to data, technology
and operations management. Some of the major focus areas of Basel III include:
โข Consistent data sourcing and reconciliation: Systems need to be based on common reference data to drive market, credit, and
liquidity risk including risk-weighed-assets and regulatory and economic capital.
โข Liquidity management: Systems need to monitor intra-day liquidity and require granular data to capture and forecast short-term
liquidity coverage ratios and long-term net stable funding ratios.
โข Consistent stress testing: Create a system with common risk factors across market, credit, and liquidity risk to cover the various
supervisory stress-testing scenarios including margin requirements, cash-flow generation and back-testing needs.
โข Enhanced collateral systems: Basel III proposes forward looking (ex-ante) provisions to answer issues related to counterparty
valuation adjustment (CVA) and wrong-way risks. Systems need to develop capabilities to capture pro-forma data into models
and develop methodologies to incorporate risk weights and mitigate the effect of central clearinghouse counterparties such as
national stock exchanges.
โข Consistent risk-weighted-asset and capital calculation: IT systems should share common models and provide consistent measures
across risk types including cash flow, asset-liability management, liquidity management, and counterparty credit risk management.
โข Integrated reporting: IT systems should provide a consistent view across the enterprise to show the impact of different types of
risks and associated functional-, portfolio-, and enterprise-level reporting.
โข System flexibility, automation and scalability: Systems should be able to handle large volumes of data and automate enterprise-
wide runs while allowing for interactive โwhat-ifโ analysis at the portfolio level. As firms assess the impact of new regulations
and change their business strategy, it is imperative that systems be flexible.
โข Operational improvements: Although much focus is on Pillar 1 Capital, liquidity and leverage management, Basel III presents
a unique opportunity to streamline business and operational processes including training of key staff and senior management.
Infosys โ View Point | 3
4. Already Basel II Compliant? Take Note of these Basel III Updates
In many cases, Basel II compliant firms can use their existing infrastructure and processes to comply with Basel III proposals with
minimal additional expenses. There are exceptions, however, and Basel III requires additional compliance measures in the following
notable areas:
Regulation Subject Compliance Measures
Development of liquidity ratios Develop methodology to capture key business, data, and technical requirements to create,
validate, and back-test short-term liquidity coverage and long-term net stable funding ratios.
Development of leverage ratios Formulate leverage ratios which are risk-invariant and act as a backstop measure.
Forecast of counterparty credit risk Create capabilities to capture forward-looking pro-forma data into models. Basel III proposes forward
looking (ex-ante) provisions to help clarify issues related to CCR, CVA, and wrong-way risks.
Use of central clearinghouse Build methodologies to incorporate risk weights and the mitigating effects of CCC.
counterparties (CCC)
Use of external ratings Firms need to revisit their standardized and A-IRB approaches to measure credit and market
risk that rely on external ratings and improve their internal rating methodologies and RWA and
capital calculations.
Infosysโ Recommendations for the Current Regulatory Outlook
Infosys has a series of recommendations for companies looking to comply with these regulatory changes, and more importantly,
improve their businesses. These recommendations are intended to improve key focus areas like data reconciliation, liquidity and
leverage management, risk coverage, risk modeling, and operational and process improvements.
Data Reconciliation
โข Consistent data sourcing and reconciliation are critical. Systems need to be based on common reference data to drive market,
credit, operational and liquidity risk for both regulatory and economic capital.
โข Systems should have the ability to reconcile data across different risk categories. Position and counterparty, obligor and facility
data should be driven from a single source that is the โtruthโ version for the firm.
โข A single data load with all the attributes required for market, counterparty credit risk (CCR), risk-weighted assets (RWA), economic
capital and liquidity risk should be extracted from source systems and reconciled in the central data-warehouse systems.
Diagram A outlines a sample Basel II and III end-to-end system architecture.
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5. Liquidity and Leverage Management Risk Modeling, Capital Calculations and Reporting
โข Firms need to develop methodology to capture key business, โข For modeling, systems should share common models and
data and technical requirements to develop, validate and provide consistent measures across risk types including cash
back-test the new liquidity ratios. flow, asset-liability management, liquidity management, and
counterparty credit risk management.
โข Systems need to monitor 30-day liquidity and require granular
data to capture and forecast short-term liquidity coverage โข For capital calculations, using consistent data and models
ratios (LCR) and long-term net stable funding ratios (NSFR). allow the business line user to break down the differences
between regulatory and economic capital into sources of
โข Cash flow generation for liquidity risk should also leverage
risk, such as name concentration, sector concentration and
the cash flow generation routines that should be common
migration risk. An economic capital model allows the user
to the risk and finance system including the impact to asset
to configure economic capital calculations under multiple
liability management systems.
assumptions.
โข Systems need to understand the implications of leverage ratio
โข IT systems should provide a clear view of the impact of
requirements on capital and the asset relationship loop and
different types of risks and associated functional-level,
be able to adjust the capital and asset base to satisfy leverage
portfolio-level and enterprise-level reporting.
requirements as set by firm strategy.
โข Solutions should produce reports required internally (Pillar
โข Systems should be able to load key risk systems with common
2) and externally (Pillar 3, disclosure reports and regulatory
risk factors to enable consistent stress testing across markets,
reports).
credit and liquidity risks and look at the impact on its capital,
asset and leverage.
Operational and Process Improvements
Risk Coverage โ Counterparty Credit Risk, Stress Testing and โข Although much focus is on Pillar 1 capital and liquidity/
Collateral Management Systems leverage management, Basel III presents a unique opportunity
to streamline firmsโ business processes and improve their
โข Basel III proposes forward looking (ex-ante) provisions to
operational efficiency and effectiveness.
answer issues related to CCR, CVA and wrong-way risks in
stressed conditions. Firms need to develop capabilities to โข Program governance is a key to a successful implementation.
capture forward looking pro-forma data into the models. Firms should take a coordinated approach among the different
functional, technical and operating units and departments
โข Firms need to develop methodologies to incorporate risk
such as risk, finance, IT and the affected LOBs.
weights and the mitigating effect of central clearinghouse
counterparties. โข Firms should automate enterprise-wide runs for modeling and
reporting purposed while allowing for interactive โwhat-ifโ
โข Firms need to develop the specification of the new
analysis at the portfolio level.
requirements for trading book positions and within the
counterparty credit risk framework (e.g. credit valuation โข As firms assess the impact of new regulations and change
adjustments). their business strategy, the need for systems to be flexible is an
imperative so the firm can quickly adapt with new regulatory
โข The system must be driven with common risk factors
paradigm.
across market, credit and liquidity risk to cover the various
supervisory stress-testing scenarios including margin
requirements, cash flow and back testing needs.
โข Systems need to capture new regulatory requirements (e.g.
stress testing, limit system and risk quantification).
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6. Infosys Has the Experience to Help
Clients Prepare For and Capitalize On
Basel III Opportunities
Infosys has the experience and domain expertise to navigate through the changes and help
clients achieve goals beyond just regulatory compliance. Infosys brings a unique combination
of qualifications and experiences to regulatory compliance and Basel II and Basel III initiatives.
Our team has direct experience with large financial institutionsโ operating environments, data
and technology systems, and risk and capital. We also have deep experience implementing the
Basel framework and have regulatory experts who understand the implications of regulatory
rules on firms.
Infosys provides end-to-end solutions that help firms achieve their Basel III goals through
project management, business requirements, functional and technical architecture, model
development and validation, and capital calculation and reporting.
Infosys has undertaken major projects for financial services firms, helping them in areas
including:
โข โAs-isโ / โto-beโ assessment and regulatory impact analysis
โข Model development and validation
โข Basel II initiatives in areas of credit, market and operational risk
โข ICAAP and liquidity planning
โข Program management โ people, process, technology and control frameworks
โข Stress-testing and back-testing
โข Project management office (PMO)
โข Data, systems, technology architecture and management
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7. About the Author
Amit Patni, CFA, FRM
Amit Patni is a Principal in the Risk and Compliance practice at Infosys with 12 years of experience in implementing
large scale projects in risk management/Basel initiatives for various banking and capital markets participants.
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8. About Infosys
Many of the world's most successful organizations rely on
Infosys to deliver measurable business value. Infosys
provides business consulting, technology, engineering and
outsourcing services to help clients in over 30 countries
build tomorrow's enterprise.
For more information about Infosys (NASDAQ:INFY),
For more information, contact askus@infosys.com visit www.infosys.com.
ยฉ 2012 Infosys Limited, Bangalore, India. Infosys believes the information in this publication is accurate as of its publication date; such information is subject to change without notice. Infosys acknowledges the proprietary rights of the
trademarks and product names of other companies mentioned in this document.
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