The Basel Agreements, designed to pursue financial stability, have been instead a cause of instability, revealing fundamental analytical and operational weaknesses. The idea to define a constant capital ratio through complex statistical models implies serious dangers. A radical change is...

The article examines the determinants of capital-assets ratios for credit unions in the United States, before and after the implementation of current framework for capital adequacy regulation in the year 2000. Credit unions appear to hold capital in excess of what is required by current capital...

Do rating models embody correctly the impact of macroeconomic variables on debtors’ solvency, determining a lag in downgrading? In pre-crisis periods, when interest rates increases are recorded as well as decreases in real growth rates, rating assessments fail to register risk increases in...

The financial crisis and the proposed changes in bank regulation seem to have inverted the trend of declining capital ratios and lower quality capital base which emerged from 2005 to 2007, especially for large Italian listed banks, and have stopped the generous dividend payouts. The recent...

Otc derivatives Counterparty risk has assumed a fundamental role within the risks assumed by Sifis, Sistemically Important Financial Institutions. Different Counterparty risk management procedures have been introduced by regulatory provisions and market best practices. Moreover, the European...

The financial crisis has highlighted, among other things, the limits of risk management and the need to identify better solutions. An effective risk management system cannot only depend on a severe internal governance scheme, ignoring other entities potentially involved, such as public...

The last two years have stressed how special and important banks are. When the financial system fails, the whole economic system is affected. The financial sector has undergone an unprecedented wave of innovation, change, consolidation and now crisis. We now have a better understanding of the...

The ABI choices on Compliance Tests have led to the drafting of the White Paper on Compliance Function and to the need to explore some topic issues. After identifying the categories of checks carried out by the Compliance Function and the main stages of Compliance Risk Management, the analysis...

The definition of an internal process to prevent and manage reputational crises is a priority for banks.The Compliance Function can offer a tangible contribution to implement an effective crisis management process.The definition of a contingency plan, of a team of crisis management and of lines...

Service agreements between the Compliance Function and Internal Auditing can be an effective and efficient option for achieving the objectives assigned to the Function and more generally to the system of corporate controls. Key principles for the drafting of AdS are not meant to be comprehensive...