FRSGlobal has announced that four of the top six Canadian banks applying the advanced approach to Basel II are using the FRSGlobal regulatory reporting system to comply with the regulation.
The company's success in delivering compliance solutions across a range of countries adopting Basel II has led to consultation between FRSGlobal and representatives of the US regulatory agencies on the challenges of implementation for the upcoming US adoption.
Using FRSGlobal's FinancialAnalytics, two thirds of major Canadian banks have set up data management and reporting applications to comply with the regulation and improve internal management.
With the implementation date for Basel II in Canada set at 1st November 2007, this year saw crucial work undertaken in developing systems and processes to ensure that banks were prepared to take on Basel Capital Adequacy Reporting (BCAR). This involved reworking and replacement of legacy systems to create the necessary management of data needed to ensure accurate reporting and measurement of risk. In addition FRSGlobal saw a number of changes occurring to the regulation that required adaptation of the systems to match the Office of the Superintendent of Financial Institutions' (OSFI) requirements.
"The task has not been straightforward as Basel II is interpreted differently across countries. We bring a wealth of experience from implementation in countries that have already adopted the accord, and have taken that work and adapted it to suit both the local legislation and the individual bank's requirements," says David Coad, VP, Americas, based in FRSGlobal's Boston office. "The work has not always been easy, with time pressure and regular change keeping the professionals at banks and FRSGlobal equally occupied."
He continues "Canada has introduced a more thorough analysis of credit risk than we have seen in other geographies, requiring increased customisation of the reporting application. Requirements would often change following discussions with the regulator and that puts time pressure on the project. We have witnessed system testing being carried out in July when the implementation is scheduled in September, giving a tight lead time."
The success of the European, Canadian and AsiaPac projects, which have taken place in more than 100 banks, shows FRSGlobal's in-depth understanding of the global regulatory environment and interpretation of local regulators' requirements.
FRSGlobal is poised to continue its delivery of Basel II regulatory reporting systems in the US, where Basel II is still to be implemented, and only last month were in discussions with representatives of the US regulatory agencies on this topic.
"We appreciate working so closely with the regulator in this advisory capacity," says Ed Shea long-time business specialist and Product Director at FRSGlobal. "Given the scope of work we have done in this area we believe that our experience will be invaluable in assisting a smooth adoption in the US. Our Centre of Regulatory Excellence are well-versed in adopting this regulation, regardless of the 'flavour' of local interpretation."