FRSGlobal

GARP Chapter Meeting – Recent Lessons in Risk Management

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FRSGlobal was the key sponsor at this GARP chapter event which focused on current business issues in risk management that impact the financial services industry in UAE.

Roy Barnes, Head of Middle East Operations at FRSGlobal, shared his knowledge on how to implement the new BIS liquidity framework. His presentation provided an insight on the consultation paper issued in December 2009 by the Basel Committee for Banking Supervision and the international framework for liquidity risk measurement, standards and monitoring which is set for implementation during 2010.

His presentation also included details on one of the key implementation requirements; the liquidity coverage ratio. This requires firms to identify the amount of unencumbered, high quality liquid assets it holds which can be used to offset the net cash outflows it would encounter under an acute short-term stress scenario.

BIS have specified that these short-term scenarios will encompass both institution-specific and systemic shocks built upon actual circumstances experienced in the global financial crisis including:

• a significant downgrade of an institution’s public credit rating;
• a partial loss of deposits;
• a loss of unsecured wholesale funding;
• a significant increase in secured funding haircuts;
• an increase in derivative collateral calls and substantial calls on contractual and non-contractual off-balance sheet exposures, including committed credit and liquidity facilities.

Roy imparted his knowledge and referred to certain regulators that have already implemented similar requirements such as the FSA in the UK.

Other guest speakers invited to address the topic included:

Feroz Noorani
Chief Risk Officer/Executive Vice President – Group Head of Risk Management
Al Hilal Bank

Dr. Björn Lenzmann
Head of Operational Risk
Emirates NBD Group

Tanveer Bhatti
Chief Risk Officer - Private Banking
Emirates NBD Group