Bank management using Basel II-data:Is the collection, storage and evaluation of datacalculated with internal approaches dispensable?

Banks all over the world are still concerned with the implementation of the new Basel Accord forCapital Adequacy which refines – among others – the minimum capital requirements. In the lastyears huge silo-like structures for data acquisition, data management, and data processing havebeen created to comply with these new standards. In addition to the compulsory regulatory practices,banks run cost-intensive internal management systems for risk/return management as theexisting regulatory systems underlie a number of limitations, which avoid an adequate measurementof the risk exposure. However, a precise measurement of the risk exposure is crucial for theoptimal allocation of the scarce resource “economic capital”. In this paper it is questionedwhether in addition to the regulatory requirements, the differing data acquisition and processingfor the internal management systems is really needed with respect to a bank-wide portfolio optimization....