MungoBrush wrote:Fletch wrote:I didn't mention Basel.
i do know where it is though, Dire Straits did a concert there in 1982 on the 'On every street' tour. Excellent concert it was too.
You keep on mentioning it so must be itching to tell us what and how you put measures in place to cope with Basel 2, so please do. Did it take long, very involved? What was it you put in place and how?
I keep mentioning Basel because it re-defined that way in which banks managed risk
This led to changes in the way that Capital Adequacy reserves were calculated
And governance - which is one of the 3 pillars of Basel II
This summary from Investopedia:
"Basel II has three pillars: minimum capital, supervisor review and market discipline. Minimum capital is the technical, quantitative heart of the accord. Banks must hold capital against 8% of their assets, after adjusting their assets for risk."
I implemented Basel II processes at 2 different banks in 2 continents in 2 different governance regimes
I implemented one of the three risk strategies - Operational Risk; Liquidity risk; and Credit Risk
Operational risk is concerned with potential for operational failures - such as happened to TSB recently
Liquidity risk is the traditional "run on the bank" scenario which is what John McDonnell says he is preparing for should he ever get to No 11
Credit Risk is what I was responsible for delivering
This involved risk-weighting all of the assets - and different approaches were taken by the 2 banks.
If you are going to risk-weight each asset then you need to calculate for each the "probability of default" and the "probability of loss / given default"
The consolidated results are then used to calculate the appropriate capital adequacy requirement.
Each program took about 18 to 24 months to build and implement
It's about to be superceded by Basel III about which I know nothing more than can be found online.
So you had nothing to do with the actual regulation side of Basel, just a part in deploying an IT system, or part of a system, for it.
I need to mention again that this is nothing to do with regulation, that existed before Basel and will continue after. This is about the system of money. Where does it come from how and by who. You seem to keep ignoring that core issue.