What do the new BCBS requirements mean for projects professionals?

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Recent changes to the policy framework governing standards for calculating regulatory capital will require significant changes to the infrastrucure of banks, leading to increased demand for experienced projects professionals.

The Basel Committee on Banking Supervision (BCBS) recently published its final standards for calculating regulatory capital for banks’ exposures to central counterparties (CCPs), and the revised policy framework will require the implementation of changes to the infrastructures of banks.

The final standards consider the manner in which banks seek to clarify and modify the existing interim regulatory capital rules on exposures to CCPs. 

What does the framework involve?

Recent changes to the policy framework governing standards for calculating regulatory capital will require significant changes to the infrastrucure of banks, leading to increased demand for experienced projects professionals. 

The final standard retains many of the interim requirements (including the general terms, scope of application, treatment of trade exposures to qualifying CCPs and the capital requirements for bank exposures to non-qualifying CCPs) but differs from them slightly.

What’s new?

  • Adopting a single approach for calculating capital requirements for a bank’s exposure that arises from its contributions to the mutualised default fund of a qualifying (QCCP)
  • Employing a standardised approach for counterparty credit risk (as opposed to the current exposure method) to measure the hypothetical capital requirement of a CCP including an explicit cap on the capital charges applicable to a bank’s exposures to a QCCP
  • Specifying the treatment of multi-level client structures whereby an institution clears its trades through intermediaries linked to a CCP

Legal impact

As with the Basel II and Basel III frameworks, the final standards are not enforced legally and only gain their indirect legal status through implementation by relevant local laws and regulations within the banking sector. It is the BCBS’s proposal that the final standards should be enforced by 2017 by the relevant regulations, but this is more of a recommendation as the frameworks aren’t legally binding.

Are you ready for a new permanent or temporary role?

The market for projects professionals in the first three months of 2015 has been solid and consistent overall with many organisations hiring at moderate to strong levels. Hiring has varied across the following areas:

  • Front office projects
  • Compliance projects
  • Finance and accounting projects
  • Operations projects
  • Group change/internal consulting/cross functional projects
  • Risk projects
  • Buy side projects

Are you experienced in Lean and Six Sigma? Find out why professionals with this expertise are in demand.

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