Urgency and uncertainty
The Basel Committee published further clarification on its proposal for a new incremental risk charge in January. What challenges does this pose from a systems perspective, and how are banks and technology vendors responding? By Clive Davidson
It was inevitable that regulators should seek to fill with some urgency the gaps in Basel II exposed by the financial crisis. And it was probably also inevitable that any new rules should be works-in-progress rather than fully formulated policies. With the incremental risk charge (IRC), designed to tighten up the management of risks in bank trading books, the Basel Committee on Banking Supervision appears to have combined urgency with uncertainty in equal measure.
Although the deadline for the
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