The Total Risk-weighted Assets Hedging capital comes from the carrying values of the CR3 template mandatory for all banks. To do this, they must move away from random approaches based on internal ratings (IRB) which, even if approved, do not generate cash surpluses from internal loss mitigation processes and therefore remain factors of aggravation of expenses and losses since, randomly, without removing the bank from uncertainty, 15% of the average turnover of the last three years is allocated to hedging capital.
The other advantage is that beyond the micro-accounts of carrying values of banks and third parties, experts in corporate tax results accounting can take into account the indicators now available for macroeconomic calculations by providing the nominal accounts of the strategy and programming of policies for absorbing budget deficits and Public Debt, thus avoiding tax increases.
Login for IT Interaction of data processing of carrying value accounts linked to your Business Indicator (BI) which is a proxy based on financial statements for operational risk reinforcing your self-financing capacity based on the Template CR3 (credit risk mitigation techniques) Mandatory for all banks for the recognition of credit risk mitigation, such as collateral and guarantees effective as of: 01 Jan 2023 according to BCBS calendar.
Your technological advances to get out of random approaches based on internal models even approved:
This is your means to get out of the approaches based on internal ratings (IRB) which, even when approved, do not generate cash surpluses of loss mitigation and are therefore aggravating factors of expenses and losses.
Cross-sector automated interaction:
A Bank & Third Parties
Insurance Companies,
Industries
Services and
Local Authorities
They are affected for the recognition of credit risk mitigation, such as collateral and guarantees even when they benefit to eligible guarantors such as sovereign entities governed by CRE 22.76.
Create or access your business account
to perform the 2 start-up operations without changing anything on IT in place.
1. Your Loss Mitigation Accounts Scheduled on 3-Year Plan for free:
Click to process your Loss Mitigation Cash Surplus Cost-Benefit Account data to be scheduled for Driving your Self-financing Capacity based on your historical data for a 3-year plan.
Request free access to Fintech SAF - V1
2. Update interaction skills through 90 days of virtual learning by doing each at their workstation: software for free until 1st quarter reporting.
Click to enrol internal team in virtual certification program by Learning by Doing at Workstation. The costs of 90 days of use of the operational management workstation interaction software are offered to you for the interaction tasks of the:
(1) CEO for Board decision making system.
(2) CFO for internal financial performance coordination system.
(3) HRD for motivation data based on incentive paid mobilizing the total paid workforce on internal financial performance objectives considering the risk appetite threshold. HRD tasks include monitoring of psychosocial risks.
(4) Operational Managers (OM) and Heads of operational units for “identification, collection and processing of loss data” (OPE25) providing non-GAAP carrying values linked to the Business Indicator (BI) which is a financial-statement-based proxy for operational risk. OM interaction tasks include variable pay or incentive paid statements.
Targeted Self-financing Capacity involving loss mitigation interaction with third parties.
Hedging capital of Total Risk-weighted Assets:
• RWA for credit risk,
• RWA for market risk and
• RWA for operational risk.
These are the banking objectives of sound practices (Counterparty credit risk governance and management) targeted by the recognition of credit risk mitigation, such as collateral and guarantees measured and monitored through third-party deposit accounts in accordance with CRE22.1:
"Banks use a number of techniques to mitigate the credit risks to which they are exposed. (...) banks may agree to net loans owed to them against deposits from the same counterparty (party to whom a bank has an on- or off-balance sheet credit exposure)": https://www.bis.org/basel_framework/chapter/CRE/22.htm
General and practical information
A. Scope of application:
The template CR3 is mandatory for all banks.
“Banks must include all CRM techniques used to reduce capital requirements and disclose all secured exposures, irrespective of whether the standardised or IRB approach is used for RWA calculation” (DIS - Disclosure requirements -DIS40 – Credit risk: https://www.bis.org/basel_framework/chapter/DIS/40.htm?inforce=20220101&published=20191215)
B. Countries Legal framework:
In the United States, the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank), the Office of the Comptroller of the Currency (OCC) passed a final rule in June 2012 which was supplemented, as were the laws of other countries, by laws implementing the final Basel III reforms such as:
For more! -Moody's Recap: https://www.moodys.com/web/en/us/insights/regulatory-news/implementation-status-of-final-basel-iii-reforms-varies-across-globe.html
C. Value-in-used:
Banks’ Self-financing Capacity (Cash Surplus from bank loss mitigation activity):
The comparative cost-benefit accounts provided in published case studies are compelling in reaching this milestone.
These are the carrying value accounts of 3 banking pools, each with 1 bank and 4 corporate third parties (1 insurer, 1 industry, 1 service company and 1 community), i.e. 15 entities.
D. Expected Impact:
Banks no longer need to be bailed out by the public treasury, nor deprive investors of their remuneration, nor fail to make investments necessary for their development, since the CR3 Template (Credit Risk Mitigation Techniques) mandatory for all banks gives access to the immense source of internal financial performance, which although known for a long time (BCBS, Public Disclosures by Banks: Results of the 2001 Disclosure Survey published in May 2003), was until now untapped due to the lack of Interaction Fintech for cross-cutting and cross-sector loss mitigation mobilizing all cash-generating units (CGUs) as well as the total paid workforce of any organization to run business as a whole.
E. Stake:
This Fintech fills the IT gaps for the assessment of the risk profile of the bank and third-party deposit accounts of a banking pool for the recognition of credit risk mitigation, such as collateral and guarantees in force as of January 1, 2023 to use the OPE22 and OPE 25 standardized approach to obtain the total capital requirement covering RWA for credit risk, RWA for market risk and RWA for operational risk based on the carrying values of the Template CR3 (Credit Risk Mitigation Techniques) Mandatory for all banks, which result from the Business indicator (BI) which is a proxy based on financial statements for operational risk and,
Beyond that, to consider the indicators now available for macroeconomic calculations providing the nominal accounts for the strategy and programming policies of the absorption of budget deficits and Public Debt avoiding tax increases.
F. Fed Recommendation to Address Interaction IT Gaps:
• “The principles set forth in the guidance can support effective third-party risk management for all types of third-party relationships, regardless of how they may be structured. Some banking organizations may form third-party relationships with new or novel structures and features – such as those observed in relationships with some financial technology (fintech) companies. Such relationships may involve the fintech company providing products or services with varying degrees of interaction with the banking organization’s customers. It is important for a banking organization to understand how the arrangement with a particular third party is structured so that the banking organization may assess the types and levels of risks posed and determine how to manage the third-party relationship accordingly” (FED, 2023).
G. Download Customer Support Material
The accounting certification handbook
Customer Handbook for cash surpluses (economic capital) to be programmed on a three-year plan
H. Formalize your orders for pro-forma invoicing
