Stringent data reporting and risk management requirements will compel banks to significantly overhaul their IT infrastructure to comply with sweeping regulatory change, power new operational efficiencies and create market differentiation.
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Gearing Up For Basel III
1. • Cognizant Reports
Gearing Up For Basel III
Stringent data reporting and risk management requirements will compel
banks to significantly overhaul their IT infrastructure to not only comply
with sweeping regulatory change but also to power new operational
efficiencies and create market differentiation.
Executive Summary operations. Given the pressure on margins,
In its depth and scope, Basel III is unlike anything we believe that banks need to go beyond the
the banking business has seen. A combination of standard applications of the new technologies.
micro- and macro-prudential norms, the global By building strong capabilities in the areas that
regulatory mandate (which rolls out this year are the focus of these regulations, banks can
through 2018) 1 requires banks to increase their differentiate themselves from their competitors.
quality of capital by focusing on liquidity and Key imperatives for banks as they prepare for
common equity; improve supervision of firm-wide Basel III include:
risk management; and provide detailed report -
ing on regulatory capital and the calculation of • Undertake a fundamental analysis of individ-
capital ratios. It mandates adherence to ratios ual businesses to identify growth drivers.
such as liquidity coverage and net stable funding, • Strengthen data management practices to
which are aimed at strengthening banks’ short create a single source of truth for all functions.
and long-term liquidity. Most prominently, Basel III • Embed key functions such as liquidity and risk
is transforming risk management into a function management into related processes across the
that fortifies banks’ sound functioning. organization.
• Invest in technologies that can free up
These changes will necessitate a fundamental resources to focus on core activities.
review of each bank’s operating model. Many • Improve project management capabilities to
banks will need to decide which businesses realize greater benefits from IT investments.
and geographies to focus on and which to exit.
Almost all banks will need to invest in technology Overall Impact
capabilities to meet Basel III’s stringent data The impact of Basel III on banks is manifold,
reporting and risk management requirements. ranging from capital (see Figure 1, next page)
and liquidity requirements to technology and
While these investments will strain bank bal - strategy implications. The new key capital ratio
ance sheets, they will also create opportunities is set at 4.5%, more than double the current
to extract additional efficiencies from day-to-day 2%. In addition, there is a new buffer of 2.5%;
cognizant reports | march 2013
2. banks with capital within the buffer zone will counterparty is likely to default. Surveys have
face restrictions on dividend payments and dis- found that several banks are not in a position to
cretionary bonuses. According to an estimate by calculate CVA instantaneously.4
McKinsey & Co., the capital requirements under
Basel III could reduce return on equity (RoE) for Global systemically important financial
banks by about 4% in Europe and 3% in the U.S.2 institutions (G-SIFI) will incur a 1% to 2.5% capital
surcharge. These banks will
Basel III’s liquidity ratios constitute a “first of need to meet the enhanced One estimate
its kind” attempt at regulating bank liquidity. Its capital requirements by
suggests that
liquidity coverage ratio (LCR) will require banks using retained earnings, rais-
to maintain cash-like assets in the short term; the ing fresh equity or reducing G-SIFIs will need
net stable funding ratio (NSFR) will determine a their risk-weighted assets to raise another
one-year-horizon liquidity buffer. For banks that (RWAs), as the risk weight-
$566 billion to
are unaccustomed to holding high-quality capital age for certain assets will
in the short term, adjusting to these requirements rise under the new regime. meet Basel III’s
will entail significant costs, which may be further One estimate suggests that capital
inflated by the increased market demand for such G-SIFIs will need to raise
requirements.
capital. another $566 billion to meet
Basel III’s capital requirements. One outcome
Basel III will also create technological challenges. of this has been a shedding of non-core assets
For one, the proposed rules require banks to by banks globally, particularly in Europe (see
report their liquidity metrics on a daily basis. Figure 2, next page). For example, Citigroup’s
Banks will, therefore, need to begin collecting data non-core assets declined from 34% in 2009 to
points, which could run into several thousands, 10% of total assets as of June 2012.5
across the organization. The mandated enhance-
ments to banks’ risk management infrastructures Banks operating in multiple countries will also
will also pressure their technology infrastructure. have to deal with other regulations, such as
Basel III also includes a credit value adjustment the Dodd-Frank Act in the U.S. (for more on this
(CVA) charge that must be calculated over and regulation, read “Implications of Dodd-Frank for
above the default counterparty risk charge that the U.S. Banking and Financial Services Indus-
was proposed in Basel II.3 This calculation needs try”), European Market Infrastructure Regulation
to be carried out on a real-time basis; it involves (EMIR) and the Markets in Financial Instrument
analyzing various trades and determining which Directive (MiFID) in the EU.
Basel III Capital Requirements Present the Biggest Challenge
18%
16%
16.5%
14%
14.5% 13.0%
12% 13.0% 11.0% 10.5%
10% 9.5%
8.5% 8.0%
8% Minimal Capital Requirement
7.0%
6% 6.0% Conservation Buffer: 2.5%
4.5% Countercyclical Buffer: 0.0% — 2.5%
4%
G-SIBs Buffer: 1.0% — 3.5%
2%
0%
Common Equity Tier 1 Total Capital
Source: “The Road to Basel III Implications for Credit, Derivatives & the Economy,” Deutsche Bank, 2012.
Figure 1
cognizant reports 2
3. Investment Banks as corporate lending, private banking and retail
The financial crisis exacted a heavy toll on stock brokerage.8 While such moves are feasible
the investment banking business, effectively for large banks, the combination of a weak econ-
ending an era of record profits. Five years later, omy and stringent regulations make it difficult
it remains a rollercoaster ride for these orga- for mid-size and smaller banks to juggle all these
nizations (see Figure 3, page 4). In the face of initiatives.
declining revenues and risk-averse investors, sev-
eral large banks have responded by slashing their Corporate Banking
investment banking business. Regulations such Basel III’s impact on non-capital market entities
as the Volcker Rule — a part of the Dodd-Frank is expected to be milder, but it will nevertheless
Act in the U.S. that restricts proprietary trading alter corporate banks’ lending practices. Higher
by banks — have added to the pressure on invest- capital ratios and liquidity requirements could
ment banks (for more on the Volcker Rule, read increase lending costs and force banks to reduce
“Volcker Rule Compliance: Preparing for the Long their lending to large corporations and/or stop
Haul”). Similar laws are likely to be enacted by lending to certain heavy industries altogether.
European countries.6 Several signs indicate that this may be already
happening. France’s Société Générale and BNP
As Basel III dawns on the investment banking Paribas announced plans to scale back their
landscape, it is expected to usher in additional aircraft and shipping financing operations. The
challenges. The trading business, for one, is Royal Bank of Scotland sold its aircraft leasing
expected to be impacted significantly. Basel III’s business in January 2012.9 There are rumblings of
market risk and securitization framework will similar moves in the U.S., as well. Meeting Basel
force banks trading in OTC derivatives to hold III’s capital requirements is expected to be tough
more capital (2% of total exposure to counter- for banks with assets of less than $500 million.10
parties7) for market and counterparty risk provi- The rules are expected to adversely impact mort-
sioning. Banks will be forced to shed lower-rated gage and real estate lending.11
assets, which will impact their trading businesses.
Such moves could, however, open opportunities
These factors are forcing a rethink of the role of for banks from relatively better-off regions,
investment banking in organizations with diversi- such as Asia, to expand into new markets. For
fied business models. This reassessment comes example, Société Générale exited the Egyptian
as many large banks undertake across-the-board market after selling 77% of its stake to Qatar
reductions in variable costs. Some wholesale National Bank, allowing the state-backed lender
banks have made a move into businesses such to expand into new markets.
Growing Non-Core Asset Market in the EU
Non-core asset transactions have increased by more than three-fold between 2010 and
2011 and have made a strong start in 2012.
€36.0 bn
Other, ¤4.0 bn
€26.6 bn
Portugal, ¤4.2 bn
Other, ¤2.0 bn
Italy, ¤1.9 bn
Ireland, ¤15.0 bn Spain, ¤3.7 bn
UK, ¤3.6 bn
€10.8 bn
Germany, ¤4.3 bn
Other, ¤1.2 bn Spain, ¤4.0 bn
Switzerland, ¤2.1 bn
France, ¤11.1 bn
UK, ¤8.8 bn
UK, ¤7.5 bn
2010 2011 June 2012
Source: “A Growing Non-Core Asset Market,” PricewaterhouseCoopers, July 2012.
Figure 2
cognizant reports 3
4. Hedge Funds have declined, would make these accounts more
For hedge funds, Basel III — combined with the expensive for retail banks to maintain.16
Volcker Rule, the EMIR and MiFID – will create
considerable challenges. The additional CVA Custodian Banks
charge under Basel III is expected to increase For custodian banks, the unfolding regulations
the cost of trades and affect trade volumes. present an opportunity to play a larger role for
Mandatory trading of OTC derivatives through buy-side clients. Basel III, the U.S. Dodd-Frank
exchanges will also increase the cost of OTC Act and the EMIR are expected to boost demand
derivatives trading.12 for higher quality collateral. According to the
Tabb Group, the clearing mandate would require
Additionally, LCR and NSFR are expected to between $1.6 trillion and $2 trillion in additional
inflate costs for hedge fund clients. As a result, collateral.17
some banks are separating their hedge funds
operations into standalone entities13 or winding As institutions that hold billions of dollars in
down operations to focus on core businesses.14 collateral, custodians are in a position to
Given that most of these regulations are still in capitalize on the growing demand.18 In fact, orga-
flux, the prolonged uncertainty is believed to be nizations such as BNY Mellon, BNP Paribas and
hampering many firms’ decision-making. the U.S. Depository Trust & Clearing Corporation
(DTCC) have launched initiatives that enable a
Retail Banks smooth flow of collateral across borders.19
The impact on retail banks will be similar to that
on corporate banks. Nevertheless, compliance will Dealing with Basel III
mean allocation of resources and planning for the The double whammy of stringent regulations
short term. The requirement to maintain greater and weak economic growth is forcing banks to
capital reserves will hamper lending. review every aspect of their businesses. While
compliance remains the top priority, banks are
In the U.S., several community and small banks continuously seeking to enhance efficiencies
have expressed concerns that Basel III capi- in their day-to-day operations to prepare for a
tal norms could undermine their ability to prolonged period of tight margins and high costs.
issue mortgages.15 Banks with substantial retail
deposits will no doubt find it easier to comply As regulatory capital increases its presence on
with the higher capital requirements. For others, banks’ balance sheets, the focus is likely to shift
building a larger deposit base could entail higher toward initiatives to increase return on equity.
costs. Also, the ensuing competition for deposits, RWAs are set to increase under Basel III’s new
which have grown only modestly as saving rates regulatory regime, prompting banks to reduce
Tough Times Not Over Yet for Investment Banks
-18% HSBC
-24% Citi
-27% JPMorgan
-30% Barclays
-57% Average
-60% Goldman Sachs
-65% RBS
Pretax profits
-73% Deutsche Bank
12 months to Q2 2012 vs.
-73% BNP Paribas
12 months to Q2 2011
-76% BofA Merrill Lynch
-77% Morgan Stanley
-80% Credit Suisse
-130% Société Générale
-179% UBS
-202% Nomura
Source: “Institutions are Struggling to Find a Sustainably Profitable Model‚” Financial News, August 13, 2012.
Figure 3
cognizant reports 4
5. such assets. Banks with strong internal ratings- Among Basel III’s efforts to mitigate risk are
based models for rating assets could apply them various micro-prudential regulations, including
to quickly and effectively reduce RWAs. capital, liquidity and leverage control through
various ratios; CVA charges; rigorous data report-
Banks are exposed Industry estimates suggest ing requirements; and restrictions on leverage
that several banks are falling and counterparty exposures. These are supple-
to multiple risk short of the required levels mented by macro-prudential regulations, such
types, and an of capital.20 Few banks have as mandates to enhance firm-wide supervision
overhaul of risk issued fresh capital to fill and governance of risk management practices
this gap, suggesting that the and regular stress testing. In anticipation of the
management markets might not respond impending regulations, banks have already begun
practices is crucial if positively to attempts to assessing their approaches to various functions
they are to survive raise capital. Banks are, and processes, such as collateral management
therefore, left with no choice and calculation of counterparty risks.
future shocks. but to take a hard look at
their businesses and scale back in areas that can- Basel III also requires banks to fundamentally
not contribute to the maintenance of the required review their trading books. The first step in this
levels of RWAs and deliver return on equity. direction is the requirement for banks to hold sig-
nificantly more capital against risky instruments
It is also becoming imperative for banks to extend such as securitized and structured products.
operational efficiencies wherever possible. This More recently, regulators have proposed changes
could be achieved through a combination of to the boundary between banks’ trading and
strategies, such as partnering with third-party banking books. The proposed changes include:
experts, pursuing M&As or creating shared ser-
vices platforms. Banks that have invested heavily • Linking the inclusion of an instrument in a
in creating IT infrastructure to support processes trading book to its tradability, followed by
such as counterparty risk management internally daily valuation and quarterly reporting of the
could even provide these platforms as a service to instrument.
other players in the industry. • Basing capital requirements on risks that
threaten banks’ solvency.
Nonetheless, compliance with Basel III will drive
many banking processes from silos into a more By any measure, these regulations are significant
integrated, collaborative and efficient operat- and, when implemented, will change the way risk
ing model. Functions such as risk management, management is perceived
which have hitherto been comparatively isolated, and practiced by banks. The
While Basel III
will now have a say in nearly all bank decisions. need for a firm-wide view compliance means
Banks may also choose to invest in advanced data of risk will mean that banks higher costs in the
analytics to find and implement ways to optimize will have to embed the risk
high-value business processes. Risk analytics, function into all of their
form of technology
for example, can be deployed on data collected processes, which will require investment
from various execution environments to enhance technology to collect and and process
risk-related processes, such as credit risk model- analyze data on a daily basis
ing and calculating risk indicators. to monitor various levels of
reorganization, it
exposure and arrive at more also presents banks
Expanding Role of Risk Management informed decisions. with an opportunity
Banks’ enterprise risk management capabilities
were found lacking in areas such as liquidity risk While Basel III compli-
to assess their
in the days leading up to the global financial cri- ance means higher costs operations and look
sis. Basel III is perhaps the largest effort under- in the form of technology for opportunities to
taken by global regulators to make banks more investment and process
secure. In today’s globally connected markets, reorganization, it also pres-
create efficiencies.
risk has also become global. Banks are exposed to ents banks with an opportunity to assess their
multiple risk types, and an overhaul of risk man- operations and look for opportunities to create
agement practices is crucial if they are to survive efficiencies. In the long run, it will influence banks
future shocks. to move to a culture of risk and evidence-based
cognizant reports 5
6. decision-making. Research firm Celent expects processes that banks will be required to under-
organizations across the capital market spectrum take will revolve around aggregating, standard-
to spend $35 billion in 2012 on risk management izing and analyzing data to derive high-quality
and risk-related compliance. Meanwhile, a survey insights for internal and regulatory consumption.
by American Banker Executive Forum found Regulatory data reporting has become stringent,
that a growing number of small banks (with less and in some cases, ad hoc reports will be required
than $100 million of assets) wish to implement to respond to random checks by regulators. The
enterprise risk management in 2012.21 quality of the underlying data, therefore, will
become highly important from the bank, regula-
Technology Implications tor and market perspectives. Inconsistencies in
Almost all the regulations under Basel III have data could attract further regulatory scrutiny and
a direct or indirect technology implication for also affect a bank’s credibility.
banks. Most of the subsequent technology
enhancements will be focused on improving Take for example, collateral management under
data management practices. Many activities/ Basel III. Banks that use internal models for
Quick Take
Basel III Implementation Timeline
2011 2012 2013 2014 2015 2016 2017 2018 2019
Parallel Run
Leverage Supervisory Migration
Jan. 1, 2013 - Jan. 1, 2017
Ratio Monitoring to Pillar 1
Disclosure starts Jan. 1, 2015
Minimum Common
3.50% 4% 4.50% 4.50% 4.50% 4.50% 4.50%
Equity Capital Ratio
Capital Conservation
0.63% 1.25% 1.88% 2.50%
Buffer
Minimum Common
Equity plus Capital 3.50% 4% 4.50% 5.13% 5.75% 6.38% 7%
Conservation Buffer
Phase-in of deductions
from CET1 (including
amounts exceeding 20% 40% 60% 80% 100% 100%
the limit for DTAs,
MSRs and financials)
Minimum Tier 1 Capital 4.50% 5.50% 6.00% 6.00% 6.00% 6.00% 6.00%
Minimum Total Capital 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Minimum Total Capital
plus Conservation 8.00% 8.00% 8.00% 8.63% 9.25% 9.88% 10.50%
Buffer
Capital instruments
that no longer qualify
Phased out over a 10-year horizon, beginning in 2013
as non-core Tier 1
capital or Tier 2 Capital
Liquidity Coverage Obser-
Introduce
Ratio vation
minimum
period
standard
begins
Net Stable Funding Obser-
Introduce
Ratio vation
minimum
period
standard
begins
Source: Basel III New Capital and Liquidity Standards, FAQs, Moody’s Analytics
Shading indicates transition periods. All dates are as of January 1 of the given year.
cognizant reports 6
7. calculating collateral will need to set up a Banks are aware of the imperative to improve
collateral management unit. This unit will be data management. Many have set in motion
responsible for calculating and making margin organizational changes to
calls, managing disputes and reporting margins realign their businesses with Banks that succeed
on a daily basis. For this, banks will need to source emerging regulations. A in the highly
data from different functional areas across survey22 by the Professional
regulated future
product and exposure types and eliminate dis- Risk Managers’ International
crepancies to ensure data integrity. Moreover, Association and SunGard will be those that
the bank, or a unit therein, will need to report the found that banks are slowly not only ensure
data to senior management and conduct annual but surely moving away
their systems
reviews to mitigate margin disputes. If discovered from the exploratory phase
by regulators, this would incur financial penalties. to implementing systems meet regulatory
Clearly, in addition to the investment involved, to improve risk manage- requirements
creating such a process will require organization- ment. However, banks that
but also, in
wide buy-in and cooperation. succeed in the highly regu-
lated future will be those doing so, unlock
However, the reality at several banks is that data that not only ensure their opportunities
continues to be managed in silos. Bank depart- systems meet regulatory
to drive down
ments use systems that suit requirements but also, in
According to a 2011 department-specific needs doing so, unlock opportuni- costs and create
ties to drive down costs and technology-led
report by the Tower and store data in varying,
incompatible formats. Inte- create technology-led differ-
Group, mid-tier grating these disparate sys- differentiators.
entiators.
banks’ data output tems will be a time-consum-
grew 150 times over ing and costly undertaking, Benefiting from Technology
especially since the amount Investment
the previous seven of data generated by banks As the impacts of Basel III fully take shape, banks
to eight years. has exploded in the past face a paradox: They need to make technology
decade. According to a 2011 investments for regulatory compliance, even as
report by the Tower Group, mid-tier banks’ data margins are squeezed and budgets constrained.
output grew 150 times over the previous seven to In such a scenario, banks need to find ways to
eight years. extract more from their IT investments. Basel III
and the other upcoming regulations offer banks
Eliminating data silos will be central to achiev- an opportunity to review and enhance their
ing compliance. This, in turn, will require banks business processes and change management
to rebuild their aging infrastructures. Stopgap programs. As they invest in technologies man-
or minimal efforts might work in the short run, dated by the regulations, banks can identify ways
but they will have adverse consequences over to use them for purposes beyond compliance.
time as individual regulations come into effect.
Banks need to draw up blueprints on the basis of The first step would be to create enterprise-wide
their current levels of preparedness and the time- views of key factors such as liquidity, risk and
line for Basel III implementation. In the case of data by eliminating silos across the organization.
collateral management, foresight and planning This could help banks identify processes and
will allow banks to utilize their assets optimally systems that have similar underlying technology
and manage collateral schedules more efficiently. to introduce operational efficiencies and enhance
decision-making.
Moreover, banks that achieve the integrated data
management levels required under Basel III will Liquidity and Capital
be able to deploy advanced analytics to mine Strong liquidity management, for example,
insights that can drive efficiencies in various will not only help senior management better
processes. Cloud-based solutions under the understand the bank’s liquidity position and
pay-per-use model can help banks turn Cap-Ex prepare for adverse liquidity situations, but it
to Op-Ex and create savings through server and would also offer insights into related process
software virtualization. optimization initiatives, such as portfolio
cognizant reports 7
8. management and loan origination. Embedding decision-making. Such a system will not only be
a liquidity perspective into processes such as able to present a consolidated view of histori-
product management can help banks enhance cal activities, but it will also forecast impending
their offerings and exploit niche market opportu- scenarios within a set of parameters. The ability
nities. Similarly, embedding their capital require- to predict future scenarios will aid in regulatory
ments into their pricing engines can allow banks reporting, as well as other areas. For example, by
to allocate capital optimally. analyzing customer data related to credit cards
and deposits, banks can deduce ways to improve
Merge Similar Risk Types various offers and marketing initiatives.
Converging different risk management systems
that share common underlying processes onto The Road Ahead
a single platform can help banks increase oper- Banks face the daunting task of meeting stake-
ational efficiencies. For holder, regulator and customer expectations
Each bank will need example, anti-fraud and while complying with stringent new regulatory
to undertake a anti-money-laundering sys- requirements that are gradually taking effect,
tems can be merged. By compliments of Basel III. This will force them to
deep-dive analysis consolidating these data seek more innovative ways of creating opera-
of its businesses sources, banks will also be tional efficiencies and market differentiation.
and extract benefits able to deploy analytics
more efficiently and cost- Each bank will need to undertake a deep-dive
to satisfy all effectively and improve analysis of its businesses and extract benefits to
stakeholders. data reporting. satisfy all stakeholders. Top management will be
under pressure to make prudent IT investments.
Leverage In-house Capabilities Clearly, there is no one-size-fits-all approach.
For banks that have built capabilities to sup- Existing business models will dictate the approach
port in-house operations (in areas such as risk that banks adopt. The optimal solution could well
management), the stringent regulatory lie in a combination of strategic decisions that
environment offers a chance to capitalize on revolve around creating operational efficien-
these investments by offering them as a service cies and collaborative work environments that
to smaller and emerging market players.23 optimize cross-functional processes.
Stress Testing Moreover, industry participants can find
Banks that have invested in stress-testing additional avenues for complying with Basel
technology can use these methods to improve III by partnering with third-party experts,
their crisis management techniques. delivering cloud-powered services to smaller
and emergent players, divesting businesses that
Big Data for Big Efficiencies drag down capital or merging with synergistic
Collating and consolidating large chunks of data institutions. Such measures can help organiza-
across data types (such as documents, images, tions succeed in a risk-averse marketplace that is
video, etc.), as well as applying meta data manage- increasingly driven by complex global regulations.
ment and predictive analytics, can help improve
cognizant reports 8
9. Footnotes
Basel III will be implemented between 2013 and 2018, with key milestones revolving around capital
1
requirements, leverage ratios and liquidity requirements. The conservation buffer is expected to be
implemented by 2019.
2
“Basel III and European Banking: Its Impact, How Banks Might Respond, and the Challenges of
Implementation,” McKinsey & Co., 2011.
3
Basel II was the second of the Basel Accords issued by the Basel Committee on Banking Supervision
in 2004.
4
Brooke Masters, “Few Banks Able to Calculate CVA Swiftly,” Financial Times, July 22, 2012.
5
“Fitch Affirms Citigroup Inc.’s Ratings; Outlook Stable,” BusinessWire, July 18, 2012.
6
Leigh Thomas and Lionel Laurent, “France Pledges Crackdown on Banks’ Proprietary Trading,” Reuters,
November 15, 2012.
7
Brooke Masters, “Banks to Hold More Capital Under Basel III,” Financial Times, July 25, 2012.
8
“Dream Turns to Nightmare,” The Economist, Sept. 15, 2012.
9
Michael Watt, “Basel III Blamed for Aircraft Financing Drought,” Risk.net, May 9, 2012.
10
Richard Suttmeier, “Changing Basel and FDIC Rules Present Challenges for U.S. Banks,” The Street,
June 13, 2012.
11
Ted Carter, “Strong Reaction from Community Banks Cited for Basel III Delay,” Mississippi Business
Journal, Nov. 16, 2012.
12
Ben Gunnee, “Soapbox: Preparing for Basel III,” The Actuary, Aug. 1, 2012.
13
Kelly Bit, “Barclays Said to Plan Spinoff of Arbitrage Team as Hedge Fund in January,” Bloomberg,
Nov. 23, 2011.
14
Katharina Bart, “UBS to Cut 10,000 Jobs in Fixed Income Retreat,” Reuters, Oct. 30, 2012.
15
Ted Carter, “Strong Reaction from Community Banks Cited for Basel III Delay,” Mississippi Business
Journal, Nov. 16, 2012.
16
“Liquidity: A Bigger Challenge than Capital,” KPMG, May 2012.
17
Michelle Price, “Industry Looks to Ease Collateral Crunch,” Financial News, Dec. 17, 2012.
18
Dominic Hobson, “Custodians Are Afraid to Exploit the Looming Collateral Shortage,” Thomas Murray,
Aug. 14, 2012.
19
Michelle Price, “Industry Looks to Ease Collateral Crunch,” Financial News, Dec, 17, 2012.
20
Brooke Masters, “Banks Face €350 bn Basel III Shortfall,” Financial Times, Dec. 15, 2011.
21
Penny Crosman, “Nine Trends Reshaping Risk Software,” American Banker, January 2012.
22
“SunGard/PRMIA Survey Finds Basel III is Driving Focus on Risk, But Implementation Is Limited,”
Sungard, June 6, 2011.
23
Nina Mehta, “UBS Starts Unit Providing Services for Quantitative Hedge Funds,” Bloomberg,
Aug. 20, 2012.
cognizant reports 9