News/Risk management
Op Risk Benchmarking, round II: helping lenders borrow
From KRIs to four-eye checks, how do op risk frameworks at regional and domestic banks stack up?
FDIC security woes make banks sweat over supervisory data
Fears over confidential reporting after inspection urges regulator to address cyber “weaknesses”
FCA warns on third-party risk management for AI projects
UK regulator keeping close eye on use of cloud and vendor partnerships to develop new models
US compliance teams face more intrusive Fed supervision
Regional banks look at enhanced data management to handle growing numbers of MRA notices
New threats, old foibles prompt banks to switch GRC vendors
Op Risk Benchmarking: more than half of participants are reviewing or switching systems
ECC default fund changes set to cut clearing member contributions
Stress loss over margin designed to ease procyclical behaviour seen during 2022 energy shock
Don’t count on repo to monetise liquidity books, say experts
QT could force banks to sell bonds during stress, underlining need for fair value accounting
US Basel endgame hits clearing with op risk capital charges
Dealers also fret about unlevel playing field compared with requirements in the EU
Bankers – shape up or ship out, says UBS compliance head
Tough approach comes as ECB prepares new guidance on conduct risk for 2024 release
Bankers call for overhaul of EBA stress tests
Support for multiple scenarios, but only if fixed assumptions and variables are scaled back
Vendors under new scrutiny in CFTC due diligence push
Planned cyber resilience regime will force dealers to subject “critical” tech vendors to stricter audit
CFTC plan to relax MMF margin restriction sparks debate
Industry welcomes proposal to lift ban on repo-using funds as eligible IM, but some warn MMFs bring risks
Nasdaq moves second matching engine to AWS cloud
Exchange and cloud partner encouraged by smooth migration with improved capacity and latency metrics
Post-crisis accounting trick haunts clearing brokers
FCMs gave up interest income for capital savings when rates were low. Now, some want it back
Rising costs prompt US borrowers to embrace compounded SOFR
Sophisticated firms with term SOFR loans increasingly willing to run basis risk to cut hedging costs
Mystery clearing member delays ICEU’s CDS transition
But Ice is confident open interest will be close to zero when service shuts down in October
Industry aims to Fix patchy exchange outage comms
A Fix working group is hoping to standardise the way that venues communicate with the sell side when tech glitches strike
Banks call for direct oversight of cloud providers by US regulators
Tri-opoly of cloud vendors “poses systemic risk” to financial sector, say risk managers
HKEX expected to cover damages in LME nickel lawsuits
Legal costs cannot be passed to members as non-default losses under the LME’s rule book, lawyers say
Third-party guidance spurs US bank rethink on fintech partners
For conventional vendors, banks say due diligence rules will be the toughest challenge
BoE model risk rule may drive real-time monitoring of AI
New rule requires banks to rerun performance tests on models that recalibrate dynamically
LCH Ltd’s RepoClear margin model gets a makeover
Changes aim to make margin models for gilt repo more sensitive to market moves
Op Risk Benchmarking: Inside the G-Sibs
New initiative scrutinises op risk measurement and management practices at the world’s largest banks
Banks frequently breach appetite for top op risks
Op Risk Benchmarking: Five G-Sibs breached appetite in past year across four risk types, new research reveals