Basel III Publications

The recent financial crisis and subsequent regulatory reform is driving need for better risk management, and Moody's Analytics strategic ERM solutions respond to these requirements. This presentation goes through key features that are crucial to better manage risk: Data capture, risk quantification and aggregation.

Author: Peter Knowles
Date: November 15, 2011

This presentation was given by Jing Zhang at Risk USA 2011 Conference in New York City. Key topics discussed include: Basel III and Its Impacts; Does ROE Really Matter to Shareholders?; and From Risk Management to Capital Management.

Author: Jing Zhang
Date: November 1, 2011

Three years after the financial crisis of 2008, banks are now operating in a dynamic economic and regulatory landscape. Among the maze of new regulation, the latest banking rules proposed by the Basel Committee for Banking Supervision are due to be adapted by national governments later this year. On the eve of the implementation of one of the key regulatory banking transformations post-crisis, banks are facing a new series of challenges. These challenges, however, are not insurmountable, and the industry will need to re define and re-invent itself in order to address them.

Author: Bianca Magee
Date: September 1, 2011

This Whitepaper explores the most significant challenge facing banks when they are implementing Basel III—the need to balance the interests of the business against the needs of the regulator. This Whitepaper explores the management impact on risk and finance; the implications of different countries taking different approaches to Basel III; the issues surrounding managing data quality and stress testing; the issue of auditing the regulatory data; the complexities of managing Basel I, II and III side-by-side, and the challenges of integrating disparate backoffice banking systems into a cohesive Basel III management framework.

Author: Pierre-Etienne Chabanel
Date: September 1, 2011

Basel III’s new requirements are having a considerable impact on banks’ businesses. As a result banks have to revisit their information and processes and how they manage these in the new environment. Basel III may not entail the same level of infrastructure investment that Basel II has required, but the impact of regulatory changes in process, professional development, governance and IT should nonetheless not be underestimated argues Maria Canamero, lead strategist at Moody’s Analytics.

Author: Maria Canamero
Date: June 11, 2011

This PowerPoint showcases Moody’s take on the impact of Basel III. It looks at trends since 2008 and how Basel III is largely good news for creditors and some banks, although it sounds a warning about the unintended consequences of regulation on banks and the demands of shareholders. Banks with solid franchises and earnings should do well, but weaker organisations will have to make significant adjustments to remain competitive. Finally, there are some strategic pointers from Moody’s to show you what needs to be done to face down these new challenges. 

Author: Alain Laurin
Date: June 1, 2011

This presentation gives examples of how stricter rules on higher capital requirements will impact on the Liquidity coverage ratio (LCR) and capital allocations. It finds there will be more constraints for banks, and touches on the importance of liquidity buffers; but it also champions shared ownership, better risk management and better performance management as the necessary response to Basel III.

Author: Nicolas Kunghehian
Date: June 1, 2011

This document drills down into the technical changes and considerations of Basel III from an IT expert’s position in order to assess the challenges posed by new regulations. By understanding what appropriate responses are to these challenges, it is possible to address the wider issue of how a business can deliver value from a regulatory investment. We also show you what we can offer in response to these challenges through our software and integrated processes.

Author: Keith Berry
Date: May 18, 2011

New regulations under Basel III tightened the regulatory framework and led to a greater focus on liquidity risk management. Read this slideshow to look at how Basel III achieves this and for a breakdown of the results of the QIS liquidity ratios, all of which point to a need for better and more comprehensive performance management.

Author: Christian Thun
Date: May 24, 2011

This presentation looks ahead to the future credit and risk climate in the wake of Basel III regulations and in particular what they mean for Enterprise Risk Management. The consensus is that banks cannot simply maintain the status quo, and that better infrastructure and risk management are paramount to ensure the lessons of the financial crisis are learnt.

Author: Charles Stewart
Date: May 2, 2011

The stark warning signs were there, but it seems banks were guilty of losing sight of the basics of risk management in the run up to the recent financial crisis. There appeared to be a culture amongst the banks of “it won’t happen to us”, and in the scrabble to keep customers, the risk officer’s job was not given the prominence or support it badly needed. However, after the debrief, there is a now a greater understanding of what to do to avoid history repeating itself. Here two of Moody’s directors explain what needs be done and unveil a new product that will help banks get it right in the future: RiskOrigins from Moody’s.

Author: Charles Stewart and Christian Thun
Date: May 2, 2011

This summary of Basel III includes a look at how the internal structure of Moody’s and its software can help organisations to interpret and implement the new liquidity and risk management recommendations set out in Basel III. We have included specific examples of the challenges Basel III throws up and how our software can meet them head on.

Author: Pierre-Etienne Chabanel
Date: May 1, 2011

This slide presentation outlines in very straightforward terms, the changes that have come about to regulation and behaviours since Basel II was updated. It also examines the reasons for the changes: in the main it seems certain types of risk were ignored altogether, but also there were no clear links to an organisation's probability to default, poor liquidity buffers and weak risk management. What Basel II aims to do is squeeze the most out of capital and introduce far more stringent and regular testing.

Author: Nicolas Kunghehian 
Date: April 1, 2011

Basel III is a comprehensive response to the 2008 financial crisis culminating in two years of regulatory reform including Basel 2.5. It introduces a new regulatory regime for capital, liquidity and banking supervision. The regulations call for higher and better quality capital, tighter standards for liquidity risk measurement, new rule around credit loss and efforts to reduce systemic risk. Read on for more information.

Date: March 11, 2011

Basel III introduces significant changes to both the amount of capital banks need to hold and the quality of capital. These changes affect the risk-weighting rules for credit and market risk, the definition of the capital, and the minimum level of capital adequacy ratio. Significant changes are proposed to the capital. Read on for more information.

Date: March 11, 2011

Basel III introduces new liquidity regulations which aim to ensure banks have sufficient liquidity over both the short and the longer term. The global financial crisis highlighted the problem that banks did not maintain sufficient levels of liquid assets. When the crisis hit, some banks were unable to meet their obligations and governments had to step in and provide liquidity support. One striking example of this was Northern Rock in the UK.

Date: March 11, 2011

Basel III introduces new requirements under both the Standardised Approach and the Internal Model Approach for market risk. Here we note the importance of calculating and managing liquidity requirements under normal and stressed conditions and the need for additional reporting to the regulators.

Date: March 11, 2011

The two and a half years since the onset of the financial crisis of 2008 have seen fundamental changes in the world of financial services. As the focus is now shifting from crisis-mode towards a business-as-usual mindset, financial services organisations are adjusting to “the new normal” - an environment impacted by a maze of new regulation, political pressure, and public scepticism. In doing so, risk management functions are increasingly working in partnership with the rest of the business to steer their firms through this changing landscape.

Author: Bianca Magee
Date: March 1, 2011

Revisions to the Basel II market risk framework require that banks develop a sound method for calculating a new incremental risk charge (IRC). This presentation shows how Moody’s Analytics “RiskFrontier“ portfolio model covers a wide variety of instruments from a credit risk perspective and can generate economic scenario forecasts. Find out more about how Moody’s IRC solution can integrate multiple layers of a risk management framework.

Author: Pierre-Etienne Chabanel  
Date: March 1, 2011

Basel III proposes many new capital, leverage and liquidity standards to strengthen the regulation, supervision and risk management of the banking sector. The capital standards and new capital buffers will require banks to hold more capital and higher quality of capital than under current Basel II rules. The new leverage ratio introduces a non-risk based measure to supplement the risk-based minimum capital requirements. The new liquidity ratios ensure that adequate funding is maintained in case of crisis.

Author: Mark Irwin
Date: March 1, 2011

In attempting to move on from the recent global economic crisis, the clever money is on Effective Risk Management (ERM) being the best way for firms to remain profitable, sustainable and secure. 83% of firms increased their spend relative to 2007, but is this enough? A culture of assessing risk must be underpinned with rigorous functions and processes, stress testing and full ownership of the issues and challenges. As we saw with Northern Rock, talk can be cheap; what’s needed to fully understand your company’s risk exposure is a top down scrutiny of resources, capital, strategy planning and performance monitoring, in both financial and non-financial terms.

Author: Charles Stewart
Date: February 23, 2011

Basel III highlighted the key reasons for the global economic downturn: excessive leverage, unsustainable credit growth and systemic risk were just some of the triggers. The suggested response is to increase capital and liquidity buffers and measure risk more accurately. Here we examine how this can be done and what practical steps your organisation can take.

Author: Nicolas Kunghehian
Date: January 24, 2011

Here we look beyond Basel III to examine the consequences of the new regulations, putting risk management and data capturing at the heart of future planning in banks and other organisations. Is it time for a back to basics approach?

Author: Charles Stewart
Date: November 1, 2010

Here we examine changes and improvements from Basel II to Basel III, such as the strengthening of the resilience of the banking sector and also look ahead to the impact of Basel III on the banks’ ratings.

Author: Alain Laurin
Date: October 19, 2010

A presentation focusing on what Enterprise Risk and Performance Management (ERPM) is and why it is necessary. We show you why it is highly necessary in the current post downturn environment and required by the regulator, by shareholders, investors and by your management. Volatile markets call for systematic analysis of expected return vs risks and ERPM is the way to achieve this at an industrial scale as it can bring long term strategic value.

Author: Gil Guillaumey
Date: October 13, 2010