"More governance, less government" underpins effective risk management
Proceedings report from the Risk Games Conference 2013, held in conjunction with The Asian Banker Summit 2013 on flawed post-crisis regulatory changes. May 15, 2013 | Research*The following is an extract of an important nine-page proceedings report on the Risk Games Conference 2013 that was held in conjunction with the Asian Banker Summit 2013. The entire report is available on the Reports Purchase page here. Post-crisis regulatory changes are flawed. Basel III and locally adopted regulatory changes, including Dodd-Frank, have failed to address the major causes of the financial crisis and, despite reams of new regulations, do not offer any new measures to prevent the next crisis. One of the main reasons Basel III has not gained enough traction is that it continues to rely too heavily on quantitative metrics, such as backward-looking models. Although models are helpful risk management tools, providing good guidance, risk management is founded on sound judgement. Diversification is key to good risk management, while uniformity of regulations is unlikely to prevent another crisis. This is particularly important if prescribed regulations are imperfect; for example, if all countries are following the same procyclical regulatory policies, all countries will suffer in the crisis. In addition, better regulatory policies would include absolute standards and hands-on supervision, including the use of minimum ratios of tangible equity capital to assets and on-site examiners evaluating viability of a bank’s assets, credit policies and other functions. The costs of Basel III have not been properly characterised, nor considered and it is highly likely that the costs of compliance with Basel III and other locally-imposed regulations will have more of an impact on the various economies than many people realise. Economic growth will likely slow, or even contract, and the financial industry will shrink, as will share markets. Although this will be partially offset by additional employment for risk management... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Basel III, Capital & Strategic Issues, Operational Risk, Regulation, Risk and Regulationbasel III,Capital & Strategic Issues,Oprisk,riskregulation,Risk and Regulation, Basel III,Capital & Strategic Issues,Operational Risk,Regulation,Risk and Regulation, Keywords:Asian Banker Summit 2013, FDIC, US Fed, CVA, NSFR, ICAAP, Counterparty Credit Risk, Systemic Risk, Liability Management Asian Banker Summit 2013, FDIC, US Fed, CVA, NSFR, ICAAP, Counterparty Credit Risk, Systemic Risk, Liability Management
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