Underestimating it would be a huge error, not least because it would put risk and compliance teams under greater (and possibly intolerable) stress. Communicate the positive benefits of building a sustainable solution to senior management as well as the imperative of avoiding fines and supervisory displeasure.įirms should simultaneously carry out a realistic assessment of the cost of compliance. Agree on the approach, get senior management buy inĮxplicitly grasp this opportunity to address regulatory compliance while improving profits and competitiveness.Here are five steps we at Moody’s Analytics recommend: If they don’t, there is a risk that a firm’s senior leadership will lose the competitive advantage of leveraging regulatory reporting requirements to increase profitability. ![]() This being the case, firms should now take the opportunity to demonstrate that budgets are spent well and deliver a sustainable return on investment. There is a growing acceptance that final Basel III provides a baseline, a foundation on which to build resilience against financial stress and loss-absorbing capacity. ![]() Some banks however are looking beyond “simply comply” and into “turning compliance into performance”. ![]() Simply complying will require a considerable investment in time, money and talent. It is now time to bite the bullet and get on with the job of complying with the rules on credit risk (standardised approach and/or internal ratings-based approach ), the standardised approach to operational risk (SA-OR), market risk (fundamental review of the trading book and so on. They do not necessarily reflect the views or positions of UK Finance or its members. The opinions expressed here are those of the authors.
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