Implications Of Basel III For Capital, Liquidity, Profitability, And Solvency Of Global Systematically Important Banks

The objective of this paper is to study the profitability and solvency implications of the proposed Basel III capital and liquidity requirements in the global banking context. The intent is to improve our understanding on how the Basel III capital and liquidity requirements impact upon the functioning of global systematically important banks (GSIBs), and how this knowledge could prove to be useful in answering questions of policy relevance like financial stability in economics. A longer-term perspective is taken in order to link capital and liquidity requirements with the notion of “systemic risk” within the evolution of the international financial and monetary system. Of special interest is the interaction between macroeconomic policy - including monetary, exchange rate and combined micro-macro-prudential policy within the setting of present-day Basel III regulatory and supervisory reforms. More specifically, the paper addresses two related issues: first, it studies and presents several financial indicators that GSIBs disclose; second, it examines how these same indicators could be related to GSIBs’ profitability and solvency

Analysis And Comments On The Consultative Document: International Framework For Liquidity Risk Measurement, Standards And Monitoring

The market turmoil that began in mid-2007 re-emphasized the importance of liquidity to the functioning of financial markets and the banking sector. In December 2009, the Basel Committee on Banking Supervision (BCBS) of the Bank for International Settlements (BIS) released a consultative document entitled: “International Framework for Liquidity Risk Measurement, Standards and Monitoring”. Interested parties were invited to provide written comments by April 16th 2010. Given our interest in promoting sound liquidity risk management and supervision, three members of the Chair responded to the BIS request. Today, we share with you a summary of our analysis and comments. Our work first supports the adoption  of the BCBS proposals on two new liquidity risk management standards which take the form of a 30-day minimum liquidity coverage ratio (LCR) combined with a one-year minimum net stable funding ratio (NSFR), both to be accompanied by a mandatory set of market-related monitoring tools. Second, we share with you several general comments and suggestions we formulated on the following topics: the need for better coordination, both domestically and internationally between macro and micro-prudential supervision, the need to formulate more precise liquidity risk requirements on foreign currency funding, the importance and usefulness of public financial disclosure, suggestions on extending the use of market-related monitoring rules and metrics. Third, we also share with you more specific comments and suggestions formulated on the following topics : areas of further work like intra-group and cross border liquidity risk management, selling to gauge market liquidity, clarifying LCR and NSFR  definitions, credit rating downgrades, and defining required stable funding categories. Fourth, the results of the analysis support the need to promote a more level business and supervisory playing field for all internationally active banks. Last but not least, we draw the risk-return and financial implications for Canadian banks of the adoption of the BCBS proposals for liquidity risk management and supervision

Identifying A Profile Of Key Competencies For Financial Planners

In order to provide quality professional education programs to advance knowledge, skills and competencies of individuals in the financial services industry and in continuing education courses, there is a need to identify a professional’s key competencies profile. In recent years, many financial planning associations worldwide have become interested in establishing competency-based requirements for certifying professionals and have adopted competency-based approaches for continuing education. The purpose of this paper is to identify a profile of key competencies for financial planners.  The empirical study is carried out through a stratified survey of financial planners within insurance companies, commercial banks, consulting firms, credit unions, security dealers and brokers, trusts and independent professionals.  More than individual knowledge or skills, this research views professional competence as result-oriented, expressing an optimal mobilization and use of resources available in the multidisciplinary areas of financial planning, according to professional standards and in harmony with best practices to achieve customer satisfaction. The research design presents an innovative conceptual framework which facilitates the identification of a profile of key competencies for financial planners. Findings enable an advance in knowledge, both at an academic and a professional level, by identifying a profile of twelve specific dimensions of key competencies for financial planners within the financial services industry

Modeling The Performance Evaluation Of Local Investment And Economic Development Corporations

The purpose of this research is to propose an overall performance evaluation model for local development companies that takes into account social, financial and operational aspects.  While there are many ways to evaluate business performance, few make it possible to take into account all the objectives of the organization. After reviewing the literature on the topic, we developed a model that uses a surface measurement to classify organizations. We then applied this model to the Société locale d’investissement et de développement d’emploi du Québec (SOLIDEQ), which itself comprises 84 SOLIDEs.  The mission of these organizations is to provide venture capital to regional companies. As an arm of a labor-sponsored venture capital corporation, the SOLIDEs must obtain a return on investment commensurate with the risk incurred, achieve local development objectives such as job creation and maintenance, and lastly, manage operations wisely given that the management committee consists of volunteers. The study results show that our model can be effectively used to measure the performance of each SOLIDE and to create a classification that takes into account all their objectives

When do we dare to stop biological or immunomodulatory therapy for Crohn's disease? Results of a multidisciplinary European expert panel.

BACKGROUND: Safety and economic issues have increasingly raised concerns about the long term use of immunomodulators or biologics as maintenance therapies for Crohn's disease (CD). Despite emerging evidence suggesting that stopping therapy might be an option for low risk patients, criteria identifying target groups for this strategy are missing, and there is a lack of recommendations regarding this question. METHODS: Multidisciplinary European expert panel (EPACT-II Update) rated the appropriateness of stopping therapy in CD patients in remission. We used the RAND/UCLA Appropriateness Method, and included the following variables: presence of clinical and/or endoscopic remission, CRP level, fecal calprotectin level, prior surgery for CD, and duration of remission (1, 2 or 4 years). RESULTS: Before considering withdrawing therapy, the prerequisites of a C-reactive protein (CRP) and fecal calprotectin measurement were rated as "appropriate" by the panellists, whereas a radiological evaluation was considered as being of "uncertain" appropriateness. Ileo-colonoscopy was considered appropriate 1 year after surgery or after 4 years in the absence of prior surgery. Stopping azathioprine, 6-mercaptopurine or methotrexate mono-therapy was judged appropriate after 4 years of clinical remission. Withdrawing anti-TNF mono-therapy was judged appropriate after 2 years in case of clinical and endoscopic remission, and after 4 years of clinical remission. In case of combined therapy, anti-TNF withdrawal, while continuing the immunomodulator, was considered appropriate after two years of clinical remission. CONCLUSION: A multidisciplinary European expert panel proposed for the first time treatment stopping rules for patients in clinical and/or endoscopic remission, with normal CRP and fecal calprotectin levels