Operational risks associated with bank compliance take on increasing importance in Korea
Proceedings report from the Korea Banking Risk Dialogue 2013, on the need of a proper risk appetite framework to drive clear articulation of a bank’s strategy and attitude towards risk. July 18, 2013 | Research*The following is an extract of an important seven-page proceedings report on The Asian Banker’s Korea Banking Risk Dialogue 2013. The entire report is available here. Basel III implementation and key risks faced by Korean banks Basel III implementation in Korea will commence on December 1, 2013, as the Financial Services Commission (FSC) looks to abide by the agreement reached with BCBS. FSC's banking supervision priorities are to manage risk from household debts, strengthen risk surveillance (regular stress test) and pursue prompt restructuring of ailing companies. The recent global financial crisis was caused by misalignment of market players' incentives and weak bank regulation and supervision. The conditions are very different in the current Korean banking sectors. Adopting a strategic risk management framework Regulation will continue to dominate the risk management landscape. Banks have to consider risk management not only as a compliance requirement, but also as a strategic management tool that drives strategic business decisions. Stress scenario development is the most important process when conducting stress testing. To conduct stress testing activities that are appealing to senior management and other stakeholders, the scenarios must satisfy the following six conditions: they must be objective, forward-looking, comprehensive, dynamic, and also must hit the firm’s weak spots and challenge the firm’s risk appetite. *To access the entire report please click here. See also: - Country data ...
Categories: basel III,China,Oprisk,riskregulation,Risk and Regulation,south korea, Basel III,China,Operational Risk,Regulation,Risk and Regulation,South Korea, Keywords:Systemic Risk, Counterparty Risk, FSC, CCP, Portfolio Reconciliation, OTC Derivatives, ICAAP Systemic Risk, Counterparty Risk, FSC, CCP, Portfolio Reconciliation, OTC Derivatives, ICAAP
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