Exposing the severity of tenor mismatch: From repricing to basis risk
Most banks collect money in the short term and use the resulting funds to make loans in thelong term. But managing the ‘tenor mismatch’ between these assets and liabilities can be achallenge for the treasury...
Deposit Mobilization: A Race to the Bottom of Margins
In this environment where retail deposits are more valuable and more expensive, thecompetition for deposits continues to heat up. Banks with liquidity challenges turn topromotional pricing to raise rate-sensitive deposits – a race to the bottom of margins.
Facing interest rate risk in the Ghanaian banking system head on
When interest rates change the present value of assets and liabilities also change exposing the banks to interest rate risk. Changes in interest rates do not have the same impact on the discounted value of assets and liabilities since they are not invested to the same terms.
1st Quarter 2023: Loan Book Watchlist
Financial institutions are faced with several common challenges. Many of these challenges are preventable or controllable, but often result in a lasting value impact.
Strategic Performance Optimization using IFRS 9 Analytics: A Nigerian Case Study
The main objective of IFRS 9 is to identify significant increases in credit risk (SICR) on a timely basis. The standard assumes that the reserves derived using forward-looking Expected Credit Loss (ECL) parameters would adequately offset the loan losses.
4th Quarter 2022: Loan Book Watchlist
With adversity comes innovation. An economic downturn necessitates the impetus to transform business and improve performance. The profit pressures of the current economic downturn have compelled management teams to deliberately develop long-term structural advantages.
Next Generation of AML Surveillance System: BBA’s Approach
Financial crime driven by money laundering has reached global and stratospheric proportions. Funds laundered are estimated to run into trillions of dollars annually, estimated to be between two to five per cent of the world’s GDP.
3rd Quarter 2022: Loan Book Watchlist
The confluence of macroeconomic and geopolitical factors, such as, inflation, supply chain disruption, higher interest rates, an overheated housing market and Russia’s invasion of Ukraine contribute to the stagflation pressures in Ontario and other Canadian jurisdictions
Newsletter: Featured Insights Series - Issue 7 | July 04 2022
Post-COVID knock-on risk, relating mainly to inflation due to the supply-chain bottlenecks, and Evergrande/China risk manifested relatively higher severity during the 3rd quarter
Business Case for Granular Ratings Scale
The amount of Expected Credit Loss (ECL) necessary to support a credit portfolio depends on the probability distribution of the portfolio loss.By using the aggregate credit quality as a proxy for the ECL, the portfolio is subjected to risk arising from the loss of granularity.