Risk management
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Challenges
In June 2004, the Basel Committee on banking supervision issued its much publicized revised framework, “International Convergence of Capital Measurement and Capital Standards”, which supersedes the original 1988 Basel Capital Accord (Basel I). The revised Basel II framework represents a significant improvement from the Basel I Accord, which was widely perceived to lack risk sensitivity. Two years later, Basel II was enacted within european regulation via two Directives (often referred to as “Capital Requirement Directive” or “CRD”). The adoption of the european directives within Luxembourg regulation took place shortly after, through three Circulars issued by the CSSF. With Basel II/CRD going “live” in January 2008, financial institutions must address the multi-faceted challenge of implementing a complex risk management framework now.
Deloitte services offering
Our comprehensive and well proven Basel II / CRD approach improves risk management practice performance and efficiency while setting up or refining our clients’ risk management framework to fully comply with the applicable regulatory requirements. We work closely and collaboratively with our clients, providing the right support commensurate to their needs. Our Luxembourg based risk management professionals are recognized experts in the market place and within Deloitte global network. They will provide you with the knowledge, technology and outstanding experience they have gained on numerous Basel II / CRD projects they have performed for leading financial institutions in Luxembourg but also gained while bringing their expertise to Deloitte global clients in other european countries and even beyond the european borders.
Deloitte is the only adviser able to provide the vast array of services required to address such a multi-disciplinary challenge. The wealth of experience that our Luxembourg risk professionals have combined with our market leading network of risk professionals and our proprietary tools, enable our clients to efficiently implement this new framework.
Depending on our client’s risk management practice maturity level, we provide customized services designed to build a tailored framework or to review and enhance the current framework.
Our services are focused on the building blocks of a risk management framework:
- Detailed gap analysis
- Framework development / expert review or internal audit support
- Basel II or Liquidity Framework roll-out (implementation)
- IT tools selection
- Pillar II / ICAAP update
Deloitte can also help you by:
- Implementing AMA for Operational Risk
- Developing quantitative models for Credit, Operational and Market Risks
- Selecting approaches for credit risk and processing to simulation in relation with the implementation of credit risk mitigation techniques
- Assisting in the calculation of Solvency ratio
- Assisting in the optimization of processes in relation with large exposures regime
- Training management and staff in relation with Basel II framework
- Assisting in the implementation and reliability assessment of the Value-at-Risk tool
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