Basel II

The Basel II Capital Accord is here, but in a time when its intended impact looks very different from the reality of the situation:

• Capital holdings and liquidity are reduced significantly
• Old risk models have proven to be inadequate
• Uncertainty exists regarding the future of Basel
• Financial services firms face increased regulatory burdens

You need to look at ways to make the Basel Accord work for you, even if capital has dried up.

Track your operational risks – to get the most accurate capital allocation, you need to have a definitive sense of your risk portfolio, especially on the operational side. Perform qualitative and quantitative assessments, scenario analysis and statistical modeling on your processes.

Review your performance – use the same information you’re gathering for risk purposes and get more out of it. Can your processes be executed better? Do you have the right people in the right places? Look a little deeper.

More informed strategic decisions – executives and boards need clear, relevant information as quickly as possible. ERA provides a wide variety of detail and summary reports that can be tailored to address your specific needs, and ensure that your ERM activities are aligned with your strategies.

Use ERA and the Methodware Basel data model to help monitor your compliance with the individual provisions of the Basel Accord.