CCAR & DFAST: How to incorporate stress testing into banking operations + str...Grant Thornton LLP
Banks are integrating elements of regulatory stress testing into their everyday business processes and strategic planning exercises, and optimizing enterprise risk management in the process. What does enterprise wide stress testing mean for a financial institution? What are the impacts and implications to a financial institution?
An industrial approach to risk and control self-assessmentsGrant Thornton LLP
Derive more value from your risk and control self-assessment process, and integrate your organization’s overall operational risk management process to comply with Dodd Frank and other legislation. We specialize in working with clients to help identify, remediate and resolve assessment gaps so they efficiently meet or exceed regulatory requirements.
CCAR & DFAST: How to incorporate stress testing into banking operations + str...Grant Thornton LLP
Banks are integrating elements of regulatory stress testing into their everyday business processes and strategic planning exercises, and optimizing enterprise risk management in the process. What does enterprise wide stress testing mean for a financial institution? What are the impacts and implications to a financial institution?
An industrial approach to risk and control self-assessmentsGrant Thornton LLP
Derive more value from your risk and control self-assessment process, and integrate your organization’s overall operational risk management process to comply with Dodd Frank and other legislation. We specialize in working with clients to help identify, remediate and resolve assessment gaps so they efficiently meet or exceed regulatory requirements.
Operational Risk Management under BASEL eraTreat Risk
Operational risk have always ignored by Banks as they thought Credit and market risks can cause catastrophe. But history of misfortunes taught us different lessons. Controls and internal audit have long been construed as guard till BASEL II dictates forced banks to look with insight. Understand the dimension of ORM in this presentation.
Third Party Risk Management IntroductionNaveen Grover
On October 30, 2013 the Office of the Comptroller of the Currency (OCC) issued updated guidance on third-party risks and vendor management. The OCC's bulletin points out that its updated guidance replaces OCC Bulletin 2001-47, "Third-Party Relationships: Risk Management Principles," and OCC Advisory Letter 2000-9, "Third-Party Risk."
Risk assessment usually involves complicated digital lending journeys of creating complex predictor and indicator models through multiple fragmented platforms. Siloed data across systems and spreadsheets delay risk reporting, updates to existing risk modelling system, increases costs and decreases operational efficiency.
This makes it difficult to keep pace with dynamic models, regulatory changes and emerging best practices. ORIGINATIONNEXT RAM represents a generational leap in risk assessment and rating by creating tighter integration between risk model developers, risk management teams.
Operational Risk : Take a look at the raw canvasTreat Risk
Operational risks by banks have never been recognised till BASEL II imposed on banks to look forward. Take a look at the broad canvas of Operational risks applicable for banks
Taking the road to advanced approaches and heightened standards in risk manag...Grant Thornton LLP
Develop and execute a roadmap to meet rising regulatory and stakeholder expectations. Banks of all sizes are required to build sophisticated analytical risk management capabilities in compliance with Dodd-Frank and other legislation making a priority of optimizing the deployment of capital and infusing objectivity into its allocation.
Here is a brief description of third-party risk management (TPRM), how to onboard third-party vendors, and what the role of a CISO is in this process. To know more about TPRM and information security management, click here: https://www.eccouncil.org/information-security-management/
Operational risk management and measurementRahmat Mulyana
a short description in mixed English and Bahasa Indonesia on Operational Risk Management and Measurement, in particular value at risk calculation using Monte carlo Simulation. Another method using EVT (Extree Value Theory) will be delivered shortly. regards
How does Operational Risk Management fit into an organization's Strategic Planning? This presentation attempts to provide a functional and implementable response.
Operational Risk Management under BASEL eraTreat Risk
Operational risk have always ignored by Banks as they thought Credit and market risks can cause catastrophe. But history of misfortunes taught us different lessons. Controls and internal audit have long been construed as guard till BASEL II dictates forced banks to look with insight. Understand the dimension of ORM in this presentation.
Third Party Risk Management IntroductionNaveen Grover
On October 30, 2013 the Office of the Comptroller of the Currency (OCC) issued updated guidance on third-party risks and vendor management. The OCC's bulletin points out that its updated guidance replaces OCC Bulletin 2001-47, "Third-Party Relationships: Risk Management Principles," and OCC Advisory Letter 2000-9, "Third-Party Risk."
Risk assessment usually involves complicated digital lending journeys of creating complex predictor and indicator models through multiple fragmented platforms. Siloed data across systems and spreadsheets delay risk reporting, updates to existing risk modelling system, increases costs and decreases operational efficiency.
This makes it difficult to keep pace with dynamic models, regulatory changes and emerging best practices. ORIGINATIONNEXT RAM represents a generational leap in risk assessment and rating by creating tighter integration between risk model developers, risk management teams.
Operational Risk : Take a look at the raw canvasTreat Risk
Operational risks by banks have never been recognised till BASEL II imposed on banks to look forward. Take a look at the broad canvas of Operational risks applicable for banks
Taking the road to advanced approaches and heightened standards in risk manag...Grant Thornton LLP
Develop and execute a roadmap to meet rising regulatory and stakeholder expectations. Banks of all sizes are required to build sophisticated analytical risk management capabilities in compliance with Dodd-Frank and other legislation making a priority of optimizing the deployment of capital and infusing objectivity into its allocation.
Here is a brief description of third-party risk management (TPRM), how to onboard third-party vendors, and what the role of a CISO is in this process. To know more about TPRM and information security management, click here: https://www.eccouncil.org/information-security-management/
Operational risk management and measurementRahmat Mulyana
a short description in mixed English and Bahasa Indonesia on Operational Risk Management and Measurement, in particular value at risk calculation using Monte carlo Simulation. Another method using EVT (Extree Value Theory) will be delivered shortly. regards
How does Operational Risk Management fit into an organization's Strategic Planning? This presentation attempts to provide a functional and implementable response.
Dallas and Fort Worth certainly have some great steak and barbecue places, but there’s much more to the dining scene there these days. Southwestern Cuisine was invented at Rosewood Mansion on Turtle Creek, and it’s still a maturing and growing movement. There’s also small family restaurants, husband-and-wife chef/owners, gastropubs, trattorias, and ethnic places. Here’s our favorites:
Список горячих линий по обезболиванию и паллиативной помощи в РоссииФонд Вера
Ситуация с обезболиванием в России потихоньку становится лучше, но это микроны, а страдающих людей сотни тысяч. Ассоциация хосписной помощи при поддержке фонда помощи хосписам Вера провела огромную работу и обзвонила все-все горячие линии по обезболиванию в РФ.
По идее, если вдруг не получается быстро и бесплатно получить для близкого человека нужные препараты, то надо позвонить на один из номеров в таблице и уполномоченные люди на том конце провода помогут разрешить ситуацию в течение суток.
Considerations for an Effective Internal Model Method Implementationaccenture
In this Accenture Finance & Risk presentation we discuss an approach banks can use to develop, manage, and monitor a robust and effective Internal Model Method program. Learn more about the Accenture Finance & Risk Practice: bit.ly/2j2JD6X
Whitepaper-Minimising Customer Impact on Bank MergersSinjo Alex
Unlock the immense potential of demand forecasting in the retail industry with this article. Harness data science techniques to accurately predict customer demand, optimize inventory management, and drive profitability. Explore predictive analytics, machine learning, and advanced algorithms to uncover hidden patterns in vast datasets. Learn to leverage historical sales data, market trends, customer behavior, and external factors to create robust forecasting models.
RISK-ACADEMY’s guide on risk appetite in non-financial companies. Free downloadAlexei Sidorenko, CRMP
Risk appetite refers to an individual or organization’s willingness to take on risks in pursuit of potential returns. It is an important consideration for businesses, as it can determine the types of investments and strategic decisions they make. A high risk appetite may lead to a focus on high-growth, speculative investments, while a low risk appetite may result in a preference for more conservative, steady returns. It is important for businesses to carefully assess and manage their risk appetite in order to make informed decisions and achieve their financial goals.
But before beginning the conversation about risk appetite, it is important to remember that most non financial organizations have already documented their appetites for different common decisions or business activities. Segregation of duties, financing and deal limits, vendor selection criteria, credit limits, treasury limits on banks, investment criteria, zero tolerance to fraud or safety risks – are all examples of how organizations set risk appetite.
What is risk appetite:
10% of the time risk appetite is imposed by laws and regulations, not set – Often risk appetite is imposed by government, regulators, markets, not set by management. Examples include zero-tolerances or limits on safety, bribery and corruption, AML, pollution, sanctions, privacy.
10% of the time risk appetite is the gentlemen’s agreement between Board and management – Boards have an important oversight role and help them set the direction and boundaries for management decision making. Those management decision making boundaries is risk appetite. Examples include deal approvals only by Board above a certain limit, limits on holding percentage of cash in certain pre-approved banks, market risk limits, credit risk limits, insurance thresholds, rules on credit limits for certain types of customers, limits on investments in different countries, etc.
80% of the time risk appetite is the risk reward trade-off for a specific decision – The key is making uncertainty around decisions presented to the Board transparent to allow decision makers choose the alternative which offers the most appropriate risk reward balance according to their individual appetites.
Download the full guide to read about documenting risk appetite, reviewing risk appetite, case studies and examples and addition video resources: Guide to risk appetite 2023
This comprehensive risk report provides a detailed analysis of potential risks and vulnerabilities within a company that conducts self-audits. Offering insights into both operational and financial aspects, the report identifies areas of concern, outlines risk mitigation strategies, and aims to enhance transparency and governance within the organization. By proactively addressing risks, the company demonstrates its commitment to effective self-regulation and sound business practices.
Building out a Robust and Efficient Risk Management - Alan CheungLászló Árvai
Credit Derivatives are off-balance sheet financial statements that permit one party to transfer the risk of a reference asset, which it typically owns, to another one party (the guarantor) without actually selling the assets.
- Observations on new commercial lending activity in the market and regulatory concerns
- Industry Events and Important releases to be mindful of
- CEIS Spotlight on Mr. Christopher “Kit” Webbe, Structured Finance & International Specialist
- Ms. Liz Williams answers Common Questions about the “ALLL – Important” ALLL Validation
http://www.ceisreview.com/the-ceis-quarterly-newsletter-volume-2-issue-1/
Risk & Advisory Services: Quarterly Risk Advisor Feb. 2016CBIZ, Inc.
In this issue: 1) Invest in Specialty Skills and Other Tips for Internal Audit Planning
2) Cyber Risk - Now It IS the Daily News 3) How to Build an Actionable Incident Response Strategy.
1. navigant.comF I N A N C I A L S E R V I C E S
F i n a n c i a l R i s k M a n a g e m e n t
Stress testing has long been an integral part of risk management. Prior to the recent credit
crisis, bank stress testing programs typically involved the development of scenarios that
mimicked the impact of events such as the Russian debt crisis and Long-Term Capital
Management’s failure.
Post-financial crisis, more stringent regulatory guidelines surrounding capital and liquidity
standards have necessitated a complete overhaul of bank stress testing programs. The
Dodd-Frank Wall Street Reform Act of 2010, among other mandates, requires financial
institutions to assess the capital needed in order to weather a steadily deteriorating
economy or sudden economic shock. The primary goal of the stricter stress test and capital
plan rules is to spur a significant improvement in the internal infrastructure, planning, risk,
and forecasting capabilities of financial organizations. While the requirements, at least for
the initial assessment date in March 2014, are less onerous for banks with $10 to $50 billion in
assets, the underlying principles described in greater detail below apply to all firms.
STRESS TESTING & CAPITAL PLANNING
2. e x p e c t
EXPERT GUIDANCE
FUNDAMENTAL PRINCIPLES PER THE GUIDANCE INCLUDE:
Principle 1: A banking organization’s stress testing framework should include activities and
exercises that are tailored to and sufficiently capture the banking organization’s exposures,
activities, and risks.
Principle 2: An effective stress testing framework employs multiple conceptually sound stress
testing activities and approaches.
Principle 3: An effective stress testing framework is forward-looking and flexible.
Principle 4: An organization’s stress testing environment should have a robust process for
bringing together estimates of losses and capital adequacy in relation to the organization’s
stated goals for the level and composition of capital.
Principle 5: Stress test results should be clear, actionable, and well-supported and should
inform decision-making.
Principle 6: An organization’s stress testing framework should include strong governance
and effective internal controls.
HOW NAVIGANT CAN HELP YOU
Navigant’s risk management professionals have deep expertise in the areas of credit risk,
market risk, and operations risk. We have the resources and technology needed to provide
the following services to assist our clients in meeting their stress testing and capital planning
requirements.
Risk Identification – Navigant can conduct a diagnostic review of existing processes and
provide recommendations on the purpose and scope of the stress test, data requirements,
appropriate stress testing techniques, and the technology needed for implementation.
Scenario Analysis – In addition to the stress scenarios (baseline, adverse, and severely
adverse) required by the Federal Reserve, it is important for an institution to run its own
scenarios based on the risk assessment of its portfolio. Navigant can assist in designing
scenarios that assess the amount of capital and liquidity needed to support the business
activities of financial institution such that, preferably, economic and regulatory capital and
liquidity are less than the required regulatory minimum and the difference between the
bank’s calculated amount and the required amount is minimal.
3. e x p e c t
RESULTS
Loss Projection – Navigant can assist with capturing the behavioral characteristics of the
loan portfolio so that asset-level losses are modeled accurately. Additionally, Navigant can
facilitate the integration of asset-level loss projections into net interest income projections.
Data Warehouse / Data Quality /Integrity – Navigant has deep expertise in data readiness
review. Different business units within an organization have different ways of capturing
data. Therefore, it is very important to have a thorough understanding of data quality issues
and any data gaps that may exist before conducting stress tests. As a specific example,
Navigant is very well-versed in different ALM systems (which may be used to create a
pro-forma income statement) and will ensure consistent inputs from the credit, finance,
and other risk functions of the bank are being used. Enhancing data sourcing and storing
capabilities where necessary is also our core competency.
Model Validation – To comply with regulatory requirements, all high risk models of a financial
institution must be independently validated. Navigant has deep expertise in modeling
applications used in all areas of risk management and we have helped set up model
validation policies and procedures at various financial institutions.
Technology – Stress testing is not a one-time exercise. Proper processes and automation
must be in place in order to meet the periodic requirements emphasized by regulatory
guidance. Some institutions choose to utilize third party tools to conduct stress testing. In the
event an institution is inclined towards utilizing third party tools, a proper vendor selection
process as well as robust implementation is needed. Navigant can assist by providing
support in the following areas:
»» Vendor Selection Process
»» Business Requirements Development
»» User Acceptance Testing
»» Project Management