Managing Risks in Financial Services Publications

• Are you confident?
  Risk Management in the Asset Management Industry
  Third Party Assurance

Regulations change. New trends emerge. Risk Management structures and processes in Asset Management are subject to improved Governance, more Board responsibilities, and an increase in computation requirements. Demand for transparency and assurance grows when Investment Funds and Management Companies outsource to other organisations their Risk Management components. These service providers face the challenge to provide assurance on their business processes and related controls to their clients.

• The PwC ALLERT Report

The recent financial crisis highlighted that the importance of Liquidity Risk Management, as well as the severity and swiftness with which this risk can materialise, had been severely underestimated by the industry, markets and regulators alike.

• Liquidity Risk Management: Meeting the Basel III challenge

The finalised Basel III regulation published in December 2010 will have farreaching implications for the banking industry. Many experts believe the inclusion of the liquidity regulation to be the most significant modification, estimated to pose considerable challenges for credit institutions across the globe. Likely effects like disruptions to the interbank market, trapped pools of liquidity in individual territories and increased monitoring and reporting requirements will require banks to fundamentally review and improve their funding and liquidity management frameworks.

• Robust Stress Tests for Banks & Investment firms

On 11 March 2011 the CSSF published the Circular 11/506 (amending the Circular 07/301 on the ICAAP) which defines its requirements in terms of stress testing practices. While stress testing has been expected of banks and investment firms at least since the advent of the ICAAP in early 2007, the new Circular 11/506 now makes it a formal obligation for all institutions to establish a stress testing framework.

• ICAAP Getting the most out of your firm-wide Risk Management

If there is one thing that the recent financial crisis has highlighted, it is the importance of a Risk Management framework which is able to deal with risk types beyond those included within Basel II Pillar 1, i.e. Credit, Market and Operational risks. In the light of the Pillar 2 requirements, financial institutions and investment firms are obliged to strengthen their firm-wide Risk Management to foster the development of a robust risk and capital management process.

• A new challenge... Risk Management in the context of AIFMD

The final text of the Alternative Investment Fund Manager Directive (AIFMD) has been adopted on 11 November, 2010 and member states will be required to transpose the directive in their national laws within two years (i.e. early 2013 at the latest).

• How can you optimise your approach to Governance, Risk Management and Compliance?

Why is GRC important for you? The key purpose of embedding GRC within a business is to manage the risk of impairment to the organisation’s business model, reputation and financial condition from failure to meet laws and regulations, internal standards and policies, and expectations of key stakeholders such as customers, employees and society as a whole.

• UCITS IV: Moving from basic Risk Management to Best Practices

The latest economic crisis has highlighted the need to improve the Risk Management processes and structures. More than trying to find the metric, Risk Managers and Board of Directors of Management companies will have to thoroughly understand their exposures and monitor them adequately.
How should they capture all risks and build an efficient Risk Management framework?

• The new Large Exposures (LE) Regime

Deutsche Fassung: Das neue Regelwerk zu Großrisiken

During the last few months there have been numerous new regulations in consultative or final forms aiming at strengthening the resilience of the banking sector. The Directive 2009/111/EC, amending namely the Capital Requirement Directives (CRD) 2006/48/EC and 2006/49/EC, has been published in the Official Journal of the European Union on November 17, 2009. Some modifications of the CRD deeply impacting credit institutions relate to the Large Exposures (LE) regime. This Directive will be transposed into Luxembourg regulations by October 31, 2010 and will be applicable by December 31, 2010. The CSSF just issued Circular 10/450 warning banks about the new LE regime for interbank exposures.