Regulatory changes will likely require banks to increase their capital levels and hold higher-quality capital.
New York, NY (PRWEB) October 4, 2010
The mix of certain products and businesses is likely to change as banks develop a more nuanced understanding of risk and capital requirements, according to Ernst & Young’s latest survey of global bank chief financial officers (CFOs). The survey comes at a time when recent and pending financial reforms are creating uncertainties in the banking industry.
“Regulatory changes will likely require banks to increase their capital levels and hold higher-quality capital,” said Peter Davis, a principal at Ernst & Young. “While uncertainty exists over the final requirements, institutions are already taking steps today to prepare for the new regulatory environment.”
In the post-financial crisis era, banks recognize that the quantitative risk models many had relied upon are no longer adequate. The survey found that CFOs, chief risk officers and their respective organizations are coming together to focus on six key areas of risk management:
1. Reassessment of business strategy
2. Analysis and implementation of capital optimization opportunities
3. Monitoring and revision of capital adequacy goals
4. Reduction of the complexity of business operations and rationalization of legal entity structure
5. Improvements in reporting
6. Improvements in data quality and systems
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In today's globally competitive and highly regulated environment, managing risk effectively while satisfying an array of divergent stakeholders is a key goal of banks and securities firms. Ernst & Young brings together a worldwide team of professionals to help you achieve your potential — a team with deep technical experience in providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify the implications and develop points of view on relevant industry issues. Ultimately, it enables us to help you meet your goals and compete more effectively. It's how Ernst & Young makes a difference.
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