Welcome to: Lombard Risk business briefing webinar Basel III / EBA Common Reporting #3 explaining the EBA s latest announcements

Transcription

1 Welcome to: Lombard Risk business briefing webinar Basel III / EBA Common Reporting #3 explaining the EBA s latest announcements Friday 15 th June 2012 approx. 40 min

2 Webinar agenda 50 min Welcome & Introduction Rebecca Bond, Group Marketing Director Key speaker: James Phillips, Director Regulatory Strategy Basel III / EBA Common Reporting regulatory impact: explaining the EBA s latest announcements Questions & Answers

3 Basel III Business Breakfast Briefings THE IMPACT ON REGULATORY REPORTING and creating a reporting framework to meet regulatory and management demands Basel III EXPLORING THE IMPACT ON YOUR FIRM Focussing on how the regulators' new capital and liquidity demands will impact your firm's business model and operating procedures NEW LIQUIDITY DEMANDS: is this the new LIQREP? IS RISK MONITORING AND REPORTING your firm s Standard Operating Procedure (SOP)? A month from now will be too late to start preparing. What's been achieved in 2011 and what's left to do? Looking at REGULATORY REFORM: the new EU system a year on, and the new UK system. COREP, FINREP and LIQREP: consultation on reporting templates and latest developments.

4 Other topics in the series Regulatory webinar series: online business briefings April Basel III / EBA Common Reporting regulatory impact #1 May Basel III / EBA Common Reporting regulatory impact #2 15 th June Update following EBA announcements 7 th June TBA Basel III: what to do if you've left it late! TBA And no doubt more there is a big work program ahead!

5 Let s get started. with a short introduction

6 Lombard Risk today: a leading player in global risk and compliance solutions Ticker: LRM Founded in 1989 Trusted providers for more than 22 years 300+ banks, hedge funds, commodity trading and fund management clients in 25 countries Solutions for global financial services institutions No.1 provider of Regulatory Compliance solutions in both the United Kingdom and United States - with global coverage Leading Liquidity Analysis provider A market leader in Collateral Management solutions Experts in Dodd-Frank Act Title VII reporting

7 Global 270 strong in 10 global offices R&D and Testing centre Luxembourg Shanghai New York and New Jersey 489 Fifth Avenue New York, NY London Ludgate House 245 Blackfriars Road London SE1 9UF Tel: +44 (0) South Africa 34 th Floor Hai Tong Securities Tower 689 Guang Dong Road Shanghai P.R.China Tel: +86 (0) Mumbai Tel: One Gateway Center 26 th Floor New Jersey, NJ Tel: US operations Singapore 30 Raffles Place #20-04 Chevron House Singapore Tel: Hong Kong Unit 2106, 21 st Floor Harcourt House 39 Gloucester Road Wanchai, Hong Kong Tel: Tokyo Level 14, Hibiya Central Building Nishi-Shimbashi Minato-ku, Tokyo Tel: Headquarters Asia Pacific operations

8 Global client base: 300+

9 Integrated solution: regulatory compliance, liquidity analysis, management information, collateral management, Dodd-Frank reporting

10 Handing you over.

11 Speaker: James Phillips Director, Regulatory Strategy

12 Basel III / EBA Common Reporting explaining the EBA s latest announcements

13 The Implications regulatory tsunami of DFA for continues BBVA What s the focus of this webinar? explaining the latest announcements from the European Banking Authority (7 th June) and putting it all in context

14 7 th June 2012 (last Thursday) EBA/CP/2012/04 on Own Funds Consultation open until 31 st July 2012 EBA/CP/2012/05 on Liquidity Coverage and Stable Funding Consultation open until 27 th August 2012 EBA/CP/2012/06 on Leverage Ratio Consultation open until 27 th August 2012

15 12 th June 2012 (this Tuesday) EBA/CP/2012/04 on Own Funds Consultation open until 31 st July 2012 EBA/CP/2012/05 on Liquidity Coverage and Stable Funding Consultation open until 27 th August 2012 EBA/CP/2012/06 on Leverage Ratio Consultation open until 27 th August 2012 EBA/CP/2012/07 on Gain on Sale securitisation Consultation open until 12 th August 2012

16 Putting this in context Understanding EBA s consultation process Mandated to implement CRD & CRR ( CRD IV ) EBA Action plan 16 pages 320 actions 114 Binding Technical Standards us/work%20programme/annex-to-the Work-Programme.pdf

17 Last Thursday s updates: EBA/CP/2012/04 EBA/CP/2012/04 on Own Funds Not to be confused with other Own Funds consultation CP50 related to frequent regulatory reporting (to the regulator) of, amongst other things, a firm's Own Funds (Article 95) [Part II] CP/2012/02 deals mainly with definitions of Own Funds (lots of Articles [14 in fact]) [Lots of Parts] CP/2012/04 is related to mainly annual disclosure (to the public) of Own Funds (Article 424 specifically) [Part VIII] Lombard Risk REPORTER for regulatory compliance Consultation open till 31/7/12

18 The Articles of CRR and CRD

19 Last Thursday s updates: EBA/CP/2012/04 EBA/CP/2012/04 on Own Funds Four templates: Transitional Own Funds disclosure covering phasing in (applies during period 1/1/13 to 31/12/17) General Own Funds disclosure of the firm s capital position (from 1/1/18) Template describing the main features of the institution s capital instruments (from 1/1/13) Balance sheet reconciliation between financial statements and regulatory own funds to address the disparities between these two sets of data (from 1/1/13) Lombard Risk REPORTER for regulatory compliance Consultation open till 31/7/12

20 Last Thursday s updates: EBA/CP/2012/04 Own Funds regulatory vs. disclosure: A number of differences Suggests we have to expect changes post CP50 Consultation Reporting Frequency How? CP50 Regulatory Mandatory format Quarterly XBRL CP/2012/04 Disclosure Mandatory format Annually You decide Lombard Risk REPORTER for regulatory compliance Consultation open till 31/7/12

21 Last Thursday s updates: EBA/CP/2012/05 EBA/CP/2012/05 Liquidity Coverage & Stable Funding Liquidity Coverage template from 1/1/13 (as at end January 2013 first reporting) 15 days submission timeline (it s a 30 day forward stress scenario report ) so the report is to be submitted within the period it relates to Three templates Liquid Assets Outflows Inflows Calibration work to be done during period 1/1/2013 to 1/1/2015 Lombard Risk REPORTER for regulatory compliance Consultation open till 27/812

22 Last Thursday s updates: EBA/CP/2012/05 Lombard Risk REPORTER for regulatory compliance

23 Last Thursday s updates: EBA/CP/2012/05 EBA/CP/2012/05 Liquidity Coverage & Stable Funding Stable Funding template from 1/1/13 (as at end March 2013 for first reporting) 15 days submission timeline Two templates 1) Items Requiring Stable Funding 2) Items Providing Stable Funding <3 months, 3-6 months, 6-9 months, 9-12 months and 12 months + Firms should be alert to the fact that EBA is also required by the CRR to implement additional monitoring metrics also by 1/1/13: that there will be a further consultation on this in autumn 2012; The Data Point Model for the liquidity and stable funding requirements won t be seen until third quarter Consultation open till 27/812 Lombard Risk REPORTER for regulatory compliance

24 Last Thursday s updates: EBA/CP/2012/06 EBA/CP/2012/06 on Leverage Ratio Leverage Ratio template from 1/1/13 (as at end March 2013 for first reporting) 8 templates: 1. On balance sheet items 2. Derivatives and off balance sheet items 3. On and off BS additional breakdown of exposures 4. Credit derivative exposures 5. Capital and calculation of the leverage ratio 6. Alternative decomposition of leverage ratio measure components 7. General info 8. Asset encumbrance Lombard Risk REPORTER for regulatory compliance Consultation open till 31/7/12

25 Last Thursday s updates: EBA/CP/2012/06 EBA/CP/2012/06 on Leverage Ratio Leverage Ratio template Some proportionality (subject to confirmation) Threshold for ratio of derivatives exposure to total exposure in the range 0.5-2% A proposed nominal amount threshold on credit derivatives in the range m Quarterly, but be aware potential monthly in the first instance: first reported leverage ratio being calculated as a simple arithmetic mean of the monthly leverage ratios of the first quarter of 2013 Lombard Risk REPORTER for regulatory compliance Consultation open till 31/7/12

26 Last Thursday s updates: EBA/CP/2012/05 EBA/CP/2012/05 Liquidity Coverage & Stable Funding EBA intends to finalise the draft Implementing Technical Standards for European Council approval by November It is expected that larger firms will be ahead of the game as a result of them already reporting on a voluntary basis, and that smaller firms should be guided by the final CRR text which will be available much earlier than November Lombard Risk REPORTER for regulatory compliance Consultation open till 27/812

27 Early Q3: July Lombard Risk REPORTER for regulatory compliance March What s happening, and when? Now Time to set up best practice re: stress testing and MIS 1 st January 2013 Basel III start date 1 st January 2013 EBA Reporting Start Date Reporting templates expected to be finalised LCR LR End January Monthly End March Quarterly Own Funds disclosure, typically annually NSFR COREP Compliance with: Liquidity Coverage Ratio and Leverage Ratio Compliance with: Net Stable Funding Ratio Final phasing-in switched ON FINREP

28 Q H Q EBA implementation actions F M A M J J A S O N D J F M Regulator Solution CP50; 20/3/12 CP51: 26/3/12 Remaining CPs? Gap analysis NOW DPM XBRL EU Journal: After end June (ITS, incl XBRL) EBA Consultation is under way. Final Regulations end June 2012, in respect of Reporting Implementing Technical Standards Allow time to review this extensive paperwork and to determine the business impact Analysis of the impact of EBA reporting specifically, should be started now. There is a Very Large amount to go through. Gaps in business process, data sources, new calculations, and operating & reporting processes need to be identified by firms as soon as possible. From springtime you should be starting to find missing data and planning actions to gap new data Post Final - Gapping Data configuration EBA CP Version Delivery of software solution based on Consultations Following end June final rules, determine any new gaps. If you leave it all till the final rules, there will be no time EBA Final Version Delivery of software solution based on Final Rules Join the Lombard Risk Basel III programme and benefit from up to the minute review of key implementation risks, and dependencies, before they crystallise into issues needing corrective action Join Lombard Risk Basel III programme Review the EBA consultations; Determine business impact For EBA reporting, analyse gaps; Data; Processes; Computations Develop solutions to the data or process gaps Develop or buy software based on the Consultations get ahead Review the final rules once adopted by EU; fix any new gaps Getting Involved Lombard Risk Basel III programme 7 Top up with fixed software for final EBA reporting solution Lombard Risk REPORTER for regulatory compliance

29 Lombard Risk REPORTER Fully scalable, consolidated regulatory solution Lombard Risk REPORTER for regulatory compliance

30 Questions Implications & Answers of DFA for BBVA Questions submitted in advance: Question one: How far is Lombard Risk progressed with EBA product development? Questions raised during the webinar? Open for additional questions now.

31 What s Implications next? of DFA for BBVA The material supporting today s event will be made available to DELEGATES ONLY and is confidential material - please respect that. PowerPoint presentation / Summary document / EBA Common Reporting solution paper You will receive an invitation to future webinars in the Basel III / EBA Common Reporting series Thank you for joining us today we hope you enjoyed and benefited from it. If you have any questions please do not hesitate to contact us on: info@lombardrisk.com

32 Thank you