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REGULATORY RISK - critically review the International and UK regulatory…
REGULATORY RISK - critically review the International and UK regulatory risk environment.
Benefits of Risk Management - The main aim is to ensure that the firm understands risk and regards risk managers as senior internal appointments, providing the holders of these roles with the necessary support and resources to fulfil them.
Greater certainty over risk management decisions
Increased awareness and buy-in (embedding within the firm) of the importance of effective risk management
Better informed decision making
Stronger client relationships and greater customer loyalty
Reduced capital charges from regulators and central banks
Improved stock market perception and stronger share prices
An enhanced corporate reputation in the marketplace
Fewer shocks and unwelcome surprises
Reassurance for staff, stakeholders and governing bodies
Enables quick assessment and grasp of new opportunities
Supports strategic and business planning
Enhances communication within and between firms
Supports the effective use of resources
Promotes continuous improvement
Helps to focus the internal audit programme
Ensures robust contingency planning
Improves the ability to meet objectives and achieve opportunities
European Banking Authority (EBA)
The role of these ESAs is:
The development of a single European rulebook
To prepare draft laws for EU Parliament
To draft binding technical standards that are legally binding in EU Member States
To be able to override national regulation
To have additional responsibility for consumer protection
EBA's Role:
Safe guarding the stability of the financial system
Preventing regulatory arbitrage
Guaranteeing a level playing field
providing advice to the EU institutions in the areas of banking, payments and e-money regulation, as
well as on issues related to corporate governance, auditing and financial reporting.
main objective of the EBA in the regulatory policy area is to play a leading role in the creation of the
single rulebook for the EU banking system
Priority areas:
Capital and capital buffers
Liquidity
Remuneration
Leverage ratio
There are three new EU Supervisory Authorities (ESAs)
European Securities Markets Authority (ESMA)
European Insurance & Occupational
Pensions Authority (EIOPA)
EBA
Financial Groups Directive (FGD) - financial regime applying to EU-based banking/investment/insurance - It lays down requirements for the company's capital
positions and is intended to improve the stability
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