CRD IV for Banks

Overview of the evolution of banking regulation and its key areas

• The three pillars
• The main risk types
• Approach levels

Pillar 1

• Credit risk
• From Standardised to Revised
• IRB and the Output floor
• Counterparty Credit Risk and the Revised Standardised and other methods
• Credit Valuation Adjustment (CVA) and how even Basel III is changing
• Market risk and ‘Basel IV’/Fundamental Review of the Trading Book (FRTB)
• The proposed Revised method, including the Sensitivities-based Method
• Changes to the Internal Model Method (IMM)
• Operational risk
• The proposed Revised Standardised approach and end of the Advanced
• Capital ratios
• The various buffers, including MREL
• Capital
• What counts – Common Equity Tier 1, etc.
• What must be deducted
• The Leverage Ratio
• Exposures
• Liquidity
• The Liquidity Coverage Ratio
• Inflows, outflows and High-Quality Liquid Assets (HQLA)
• The Net Stable Funding Ratio (NSFR)
• Required v Available Stable Funding – the different weights

Pillars 2 and 3

• Interest Rate Risk in the Banking Book (IRRBB)
• Internal Capital Adequacy Assessment Process (ICAAP) and Supervisory review, stress tests, governance
• Disclosure
• Banking regulation and the market – the impact on Return on Equity
• Rules, principles and ideas applicable to financial promotions
• Promotions beyond MiFID – Codes of Advertising Practice, law, good taste
• What is a promotion and the extent to which it matters?
• The regulatory framework for promotions: MiFID Org Reg, article 44
• Context of financial promotions as part of product development and governance
• The effect of rule breaches