Almonde (UK) Ltd and Misys Risk Management Systems, providers of enterprise risk management solutions, today announced the release of a specialised Basel II solution for building societies in the UK.
The Basel II package solution, the first in the market tailored exclusively to address the specific challenges faced by UK building societies, provides turnkey software, consulting services and on-going support for meeting the information management demands of the forthcoming accord.
With an entry-level price of £200,000, the solution draws on the combined expertise of two industry leaders to assist UK building societies in achieving Basel II regulatory compliance.
Shawn McMorran, Almonde's CEO, comments, "The depth of Misys' understanding of UK financial institutions and their local presence will enable us to better serve long-term compliance and economic risk requirements into the future."
The Basel II solution generates Risk-Weighted Assets (RWA) and Regulatory Capital using the Standardized, Foundation and Advanced Internal-Ratings Based (IRB) approaches, including Expected Losses (EL) under the IRB approaches. It provides complete banking book and extensive trading book coverage and handles credit risk mitigation techniques such as collateral partitioning, guarantee structure management and mismatches on maturity and currency.
Integrated Scoring, Rating, Probability of Default (PD) and Loss Given Default (LGD) models are also available as add-ons. For the IRB Advanced approach, Exposure at Default (EAD) can be calculated on balance sheet and off-balance sheet exposures.
Through its process management capabilities, the specialised solution provides automation, structure and security features for making regulatory compliance easier and more auditable. The Data Store collects and maintains uploaded and calculated data historicals. Complete Basel II reports are provided and raw results are easily accessible for export downstream to reporting tools. The system is designed to incorporate on-going regulatory changes and national discretions.
The solution equips building societies to meet the demands of the Supervisory Review Process (the "second pillar" in Basel II). Regulatory capital amounts are justified through comprehensive model validation approaches that include back-testing, stress-testing, sensitivity analysis, scenario analysis and audit-trails.
Michel van Leeuwen, Chief Executive Officer, Misys Risk Management Systems, comments, "The Basel II solution includes unparalleled functional coverage, based on a robust data management platform, and provides building societies with a sound foundation for calculating economic capital."