GLOBAL INITIATIVES IN FINANCIAL RISK

MANAGEMENT
RFAA
CHALLENGES

1. Regulatory Changes
2. Rising Customer Expectations
3. Cybersecurity Breaches
4. Fraud & Identity Theft
5. Inefficient Internal Processes
6. Increasing Competition

Source : https://global.hitachi-solutions.com/blog/risk-management-in-banks/
WHO ARE INVOLVED?

 Regulators
 Payment Associations
 Central Banks
 Financial Institutions
INITIATIVES

 1. Settlement initiatives
 Trading Initiatives
 Payment Initiatives
 Capital Inadequacy Initiatives
 Accounting and Regulatory Initiatives
SETTLEMENT INITIATIVES

 Continuous Linked Settlement

 is a global initiative to reduce foreign exchange settlement risk by settling
both legs of foreign exchange transactions simultaneously. Transactions are
settled across the books of CLS Bank International (CLS Bank), a special
purpose bank established to facilitate the CLS process.
 Central Securities Depositories Regulation (CSDR) - CSDR will introduce a
new Settlement Discipline Regime (SDR) to provide a set of common
requirements for central security depositories (CSDs) operating securities
settlement systems across the EU, further harmonize certain aspects of
the settlement cycle and mitigate settlement risks.
TRADING INITIATIVES

 Collateral Usage
 New Assets
 Weather Derivatives
 • CME Seasonal Cooling Degree Days Index • CME Seasonal Heating Degree Days
Index • European Monthly CAT Index• European Monthly Heating Degree Day •
European Seasonal CAT Index • European Seasonal Heating Degree Day • Japanese
Monthly Average Temperature • Japanese Seasonal Average Temperature
CAPITAL ADEQUACY INITIATIVES

 Basel Accord
 Basel II amendment 2004
 1. Minimum Capital requirements
 2. Supervisory review and process
 3. Market discipline
ACCOUNTING AND REGULATORY INITIATIVES

 FASB 138
 IAS 39
 Sarbanes-Oxley Act 2002
401  Disclosures in periodic reports
402  Enhanced conflict-of-interest provisions
403  Disclosures of transactions involving management and principal stockholders
404  Management assessment of internal controls
405  Exemption
406  Code of ethics for senior financial officers
407  Disclosure of audit committee financial expert
408  Enhanced review of periodic disclosures by issuers
409  Real-time issuer disclosures