Fintech

How AI is changing the Risk Management & Compliance

10 Jan 2018

In this increasing debate over AI, in how it is good for mankind, and on the other side, how it is going to take away our jobs, what is the right answer? I would take the analogy of the advent of cars, trains or airplanes, in the times when people used horse carriages, horses or bullock carts. What was the advantage of a motor car or the train? Wel...

FRTB - The democratization and level playing field for the Trading book and Banking book

12 Jan 2017

FRTB can be summarized in three lines as follows: - Close the loop hole of Capital Arbitrage between the Trading and the Banking books - Calculate the Capital as if the banks are in Stressed Market Conditions - Calculate Capital using the Standardized Approach, even though Trading desks calculate the Capital Charge using ...

CECL - The new FASB accounting rule to capture expected credit losses for banks

09 Jan 2017

In June 2016, FASB unveiled a guidelines for the banks to capture the credit loss by taking into account the expected credit losses over the expected lifetime of the products, and not use the 40 year old “Incurred Loss Model. Background of the new Current Expected Credit Loss Model (“CECL”) In 2011, the FASB and the International Accounting Standar...

What does FRTB or Fundamental Review of trading book really mean?

09 Jan 2017

Remember those days when we saw Lehman employees walking out with their personal stuff in cardboard boxes, the manhandling of AIG employees in New York, the demonstrations at Wall Street and Zuccotti Park (New York), and the $ 1 trillion bailout fund that the Congress initially refused to approve? Yes, to avoid similar situations, the BIS (Basel C...