THE WORLD’S biggest banks must reorganise and centralise their risk analysis by 2016, the Basel Committee on Banking Supervision revealed yesterday, as part of a drive to make sure the sector can react more quickly in any future crisis.
Globally systemically important financial institutions (G-SIFIs) were criticised in the credit crunch for being unable to easily understand how much risk they faced.
“Improving banks’ ability to aggregate risk data will improve their resolvability,” said the new guidelines.
But as well as making life easier for the regulators, the Committee stressed more focused risk management will work in banks’ favour too. It will lead to “gains in efficiency, reduced probability of losses and enhanced strategic decision-making, and ultimately increased profitability,” the Committee claimed.