Bank Accounting & Finance articles from August 2008

Bank Accounting & Finance archives from August 2008

Will hurricane season spell disaster for the capital markets? What could go wrong with event-linked bonds?(Report)
August 1, 2008... During the past year $150 billion in losses have roiled global capital markets as financial institutions have recognized losses previously hidden by off-balance-sheet vehicles. Banks and investment banks sponsored entities known as conduits or...

Lessons from the dark side of the credit crunch: for auditors and clients, the credit crunch reaffirms that risk management can never be delegated.(Report)
August 1, 2008... The global credit crisis has heightened the importance of audit independence as well as increased risk for audit firms and their customers. Financial services institutions (FSIs) with a myriad of investments or positions held in the secondary...

Has the time for regulatory restructuring arrived? The enormity of the Treasury proposal should not lull bankers into believing that portions of it cannot be adopted.(United States Department of the Treasury)(Report)
August 1, 2008... The U.S. Treasury Department has attempted to launch the most ambitious effort to establish the boundaries of a long-term national debate on reform of the federal financial regulatory system in 74 years. It proposes to eliminate six federal...

Profitability reporting as a strategic tool: a quantitative assessment of performance can change a bank's understanding of its strategic strengths.(Report)
August 1, 2008... Community banks have not yet caught the lever of developing a profitability reporting system that measures true profitability of business lines, products or customers. The reasons for this can be as unique as each individual bank but usually...

Integrating compliance risk management into enterprise risk management: promises and pitfalls of integration, from organizational efficiencies to mixed messages.(Report)
August 1, 2008... Financial institutions face opportunities to integrate central compliance functions more fully into enterprise risk management (ERM). More fulsome integration presents both promises and pitfalls. This article discusses some of each. It proposes...

Prepayment risk and bank performance in rising and falling interest rate environments: prepayment risk is positively related to the percentage of a total loan portfolio devoted to real estate when interest rates fall and negatively when interest rates rise.(Report)
August 1, 2008... Prepayment risk embedded in mortgages is shown to have qualities of both call and put options. Specifically, as rates rise, mortgagors may put their houses to banks and walk away from mortgages. In such cases, banks have to repossess the...

Defining and using liquidity KRIs: the need to respond quickly to the first signs of trouble cannot be overestimated.(Risk Measurement)(key risk indicators)(Report)
August 1, 2008... Two fundamental truths shape liquidity risk management. First, we know that we face potentially devastating risks but that the probability of occurrence for those events is quite small. Second, we know that we simply cannot afford to hold...

The controls challenge: automation can cut costs and make processes more consistent.(Governance, Risk, Compliance)
August 1, 2008... As any senior executive in the financial services industry will tell you, the demands of implementing an effective governance, risk and compliance (GRC) strategy are growing every year, both in terms of cost and complexity. But as no one needs...

Pozen committee update: conceptual approaches and future considerations: excessive use of bright-line rules and the need to clarify the SEC's role in standards setting are among pending issues.(SEC Update)(Securities and Exchange Commission )(Report)
August 1, 2008... The Securities and Exchange Commission (SEC) solicited comments on the Progress Report of the Advisory Committee on Improvements to Financial Reporting to the United States Securities and Exchange Commission ("the progress report") at the...