Regulatory, some scenarios

Base lII

While the Basel II accord has now gone live in most parts of the world, many discrepancies still remain on advanced modeling techniques for operational risk among large international banks.  

The third of the Basel Accords was developed in a response to the deficiencies
in financial regulation revealed by the global financial crisis. It's essential approach involve the application of 2 major families of model:
  • The loss distribution approaches (LDAs) that focus on observed past internal and external loss events &
  • The scenario-based techniques that use subjective opinions from experts as the starting point to
determine the regulatory capital charge to cover operational risk. The new framework has been agreed although implementation details require ironing out. This will require major methodological challenge is the combination of both techniques so as to fulfill Basel II requirements. 
The updated guidelines are intended to strengthen bank capital requirements and 
introduces new regulatory requirements on bank liquidity and bank leverage. This follows from two rounds of public consultative process intended to improve:
1) Quality, consistency, and transparency of the capital base 
2) capital framework through Strengthened risk coverage
3) Basel II risk-based framework by introduction of a leverage ratio
4) Promoting build up of capital buffers in good times that can be drawn upon in periods of stress
5) Global liquidity standards & proactive provisioning
We can discuss and investigate the use of various alternatives
to model expert opinion in a sound statistical way so as to allow
for subsequent integration with loss distributions fitted on internal
and/or external data. In conjunction, we are able to provide numerical, business and system consultative advice to support the analysis. This will enable the implementation of most capital effective solutions.

Solvency II

Solvency II is a key regulatory initiative relevant to all insurance companies.

Sopica recognises the importance of this new regulation to its clients and has established a dedicated team of consultants to focus on providing technical, change and programme managers in this area.
Our network of associates and contacts in the industry make us ideally placed to respond to the recruitment demands which result from Solvency II related programmes.

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