As part of our series on CRR II and DPM 3.0 we wanted to discuss the incoming regulation from conception, to the present and looking forward to the future of regulation.
With Basel III in 2014, the Basel Committee on Banking Supervision introduced many significant changes to prudential standards across the financial services industry. With CRR and CRD in 2015, the EU introduced the first wave of the reforms into legislation. Because the reforms are so complex and have such a significant effect on the operations of financial institutions, the BCBS gave regulators and supervisors a grace period of several years for the implementation of the Basel standards.
CRR 2 brings some of the biggest changes to prudential regulation in the EU since CRR in 2015. Most significantly, it introduces the standardised approach to counterparty credit risk, makes the leverage ratio and the net stable funding ratio a binding requirement, changes large exposures, and introduces reporting requirements for market risk.
Dealing with these changes in CRR 2, certainly presents its challenges which we discussed in more detail, with varying perspectives and viewpoints.
🎤 Vincent Baritsch, Head of Regulatory Policy - SMBC
🎤 Gordon Kemp, Director, Prudential Regulation Expert - PwC
🎤Anita D. Millar, Risk & Public Policy Expert - ADM Risk, Regulation and Strategy
Moderated by: Enzo Casasola, Head of RegTech - Suade Labs
As part of this webinar we held a series of interactive polls. The results showed that:
- SA-CCR has been the most challenging, with over 50% of the audience voting for this, followed by NSFR at 22%.
- The audience believe that the next 3 big things to come or continue in regulation are: prudential regulation, operational resilience and ESG consecutively.
- Firms are still at varying stages of their implementation projects for CRR2, with the majority (38%) still analysing the changes.
During this series we have noticed an important theme which has been prevalent throughout; the ambiguity, which comes from analysing and understanding the regulatory changes. We noticed that the financial institutions who are using Suade spend less time and effort implementing these changes, allowing Suade's unique technology to seamlessly incorporate them. The cost effective solution provided by Suade enables firms of all sizes to reap the benefits almost instantly, due to fast implementation and the simplicity provided by the latest technologies and standardisation of data used in the Suade solution.