2007 to 2009 is a period that will remain etched in the minds of financial industry policy makers for years to come. Complex financial instruments, wrongly priced risks coupled with pressure to churn ever higher employee bonuses and bank profits all combined to create the biggest financial crisis since the Great Depression. The US and EU financial markets, once assumed impregnable, faced the real possibility of collapse pulling down the global economy in the process. As hundreds of billions of dollars in government bailouts were pumped into banks and insurance companies considered ‘too big to fail’, regulators had to come to grips with the fact that the Basel II guideline on bank risk management had loopholes and inadequacies that had to be addressed to prevent a recurrence. And with that, Basel III was born.
Basel III Not the last Regulation of its Kind
Scheduled for implementation between 2013 and 2019, Basel III takes over from its predecessor Basel II. But while the new Basel framework is meant to strengthen the management of international banking risks and thus protect bank’s customers and global financial markets, it is certain that Basel III will not be the last major regulation thrust on the banking industry. Already, banks in some jurisdictions have to deal with additional rules such as IFRS and the Dodd-Frank Act with more likely in the pipeline as the full impact of the 2007-2009 financial crisis comes into proper perspective. Continue reading
As Europe’s largest financial services institutions face a growing number of new or revamped regulations including Basel III, UCITS IV, MIFID II and Solvency II, they are caught in a dilemma. They could create separate data management infrastructure for the different regulations or they could implement a single solution that would require minimal tweaking to deliver the reporting required by each of the new regulations. Purchasing separate systems for each can be prohibitively expensive – a converged solution is the way to go.