Monday June 11 2012 - Top 10 Risk Compliance News Events (114 pages)

P a g e | 1

_____________________________________________________________ International Association of Risk and Compliance Professionals (IARCP)

www.risk-compliance-association.com

International Association of Risk and Compliance Professionals (IARCP)

1200 G Street NW Suite 800 Washington, DC 20005-6705 USA Tel: 202-449-9750 www.risk-compliance-association.com

Top 10 risk and compliance management related news stories and world events that (for better or for worse) shaped the week's

agenda, and what is next

George Lekatis President of the IARCP

Dear Member, We have 3 really important papers that have to do with the implementation of the Basel iii framework in the USA.

The three notices of proposed rulemaking (NPRs), taken together, will restructure the Board’s current regulatory capital rules into a harmonized, comprehensive framework, and will revise the capital requirements to make them consistent with the Basel III capital standards established by the Basel Committee on Banking Supervision (BCBS) and certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The proposals are published in separate NPRs to reflect the distinct objectives of each proposal, to allow interested parties to better understand the various aspects of the overall capital framework, including which aspects of the rule would apply to which banking organizations, and to help interested parties better focus their comments on areas of particular interest.

The problem is we did not learn more about the quantitative liquidity requirements and the capital surcharge for global systemically important banks (these are not part of this rulemaking). I hope we will have more details soon. Welcome to the Top 10 list.

http://www.risk-compliance-association.com/

P a g e | 2



The NUMBER 1

Basel III in the USA Proposed Rulemakings for an Integrated Regulatory Capital Framework, Questions and Answers June 7, 2012

Chairman Ben S. Bernanke

Economic Outlook and Policy Before the Joint Economic Committee, U.S. Congress, Washington, D.C. June 7, 2012

Chairman Casey, Vice Chairman Brady, and other members of the Committee, I appreciate this opportunity to discuss the economic outlook and economic policy.

Consultation paper on Draft Implementing Technical Standards on supervisory reporting requirements for liquidity coverage and stable funding 07 June 2012

The European Banking Authority (EBA) launched today a consultation on Draft Implementing Technical Standards (ITS) on supervisory reporting requirements for liquidity coverage and stable funding.

P a g e | 3



Auditing in the Small Business Environment

DATE: June 7, 2012

SPEAKER: Jeanette M. Franzel, Board Member

EVENT: PCAOB Forum on Auditing in the Small Business Environment

LOCATION: Minneapolis, MN

Auditing the Future

DATE June 7, 2012

SPEAKER(S): Jay D. Hanson, Board Member

EVENT: Fair Value Measurements and Reporting Conference

LOCATION: National Harbor, MD

FASB Board Decisions

Summary of Board decisions are provided for the information and convenience of constituents who want to follow the Board’s deliberations.

Call for evidence on Transaction Reporting From The British Bankers’ Association (BBA) to the European Securities and Markets Authority (ESMA)

P a g e | 4



The Next Phase in Islamic Finance

Ravi Menon Managing Director, Monetary Authority of Singapore

Opening Address at the 3rd Annual World Islamic Banking Conference: Asia Summit, Grant Hyatt Singapore, 5 June 2012

Governor Daniel K. Tarullo

Dodd-Frank Act Implementation Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C. June 6, 2012

Mortgage financing: FINMA recognises new minimum standards

The Swiss Financial Market Supervisory Authority FINMA has approved the new minimum re-quirements for mortgage financing drawn up by the Swiss Bankers Association (SBA) as a minimum regulatory standard.

P a g e | 5



NUMBER 1

Basel III in the USA

P a g e | 6



P a g e | 7



Basel III in the USA, Board of Governors of the Federal Reserve

3:30 PM, Thursday, June 7, 2012 - Marriner S. Eccles Federal Reserve Board Building, 20th Street entrance between Constitution Avenue and C Streets, N.W., Washington, D.C.

Matters to be Considered:

Discussion Agenda:

1. Proposed interagency rulemakings: strengthening and harmonizing the regulatory capital framework for banking organizations, including proposed rules for implementing Basel III for banking organizations and proposed consolidated capital requirements for savings and loan holding companies.

2. Final interagency rulemaking: market risk capital rule.

P a g e | 8



Proposed Rulemakings for an Integrated Regulatory Capital Framework, Questions and Answers June 7, 2012

Question 1: What does the package of proposed rulemakings contain and why is it divided into three parts?

The package contains three notices of proposed rulemaking (NPRs) that, taken together, would restructure the Board’s current regulatory capital rules into a harmonized, comprehensive framework, and would revise the capital requirements to make them consistent with the Basel III capital standards established by the Basel Committee on Banking Supervision (BCBS) and certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The proposals are published in separate NPRs to reflect the distinct objectives of each proposal, to allow interested parties to better understand the various aspects of the overall capital framework, including which aspects of the rule would apply to which banking organizations, and to help interested parties better focus their comments on areas of particular interest.

The BCBS quantitative liquidity requirements and the BCBS capital surcharge for global systemically important banks are not part of this rulemaking.

First Paper: The Basel III NPR

1. The first NPR, Regulatory Capital Rules: Regulatory Capital, Implementation of Basel III, Minimum Regulatory Capital Ratios, Capital Adequacy, Transition Provisions, and Prompt Corrective Action (Basel III NPR), is primarily focused on proposed reforms that would improve the overall quality and quantity of banking organizations’ capital.

The NPR would revise the Board’s risk-based and leverage capital requirements, consistent with the Dodd-Frank Act and with agreements reached by the BCBS in Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems (Basel III).

P a g e | 9



The proposal includes transition provisions designed to provide sufficient time for banking organizations to meet the new capital standards while supporting lending to the economy.

Second Paper: The Standardized Approach NPR

2. The second NPR, Regulatory Capital Rules: Standardized Approach for Risk-weighted Assets; Market Discipline and Disclosure Requirements (Standardized Approach NPR), would revise and harmonize the Board’s rules for calculating risk-weighted assets to enhance their risk sensitivity and address weaknesses identified over recent years.

It would incorporate aspects of the BCBS’s Basel II standardized framework in the International Convergence of Capital Measurement and Capital Standards: A Revised Framework (Basel II), Basel III, and alternatives to credit ratings for the treatment of certain exposures, consistent with the Dodd-Frank Act.

Third Paper: The Advanced Approaches and Market Risk NPR

3. The third NPR, Regulatory Capital Rules: Advanced Approaches Risk-based Capital Rule; Market Risk Capital Rule (Advanced Approaches and Market Risk NPR), would revise the advanced approaches risk-based capital rule (in a manner consistent with the Dodd-Frank Act) and incorporate certain aspects of Basel III that the Board would apply only to advanced approaches banking organizations (generally, the largest, most complex banking organizations).

This NPR would also codify the Board’s market risk capital rule and, in combination with the other components described above, would apply consolidated capital requirements to savings and loan holding companies (SLHCs).

Question 2: Which banking organizations are covered by the proposed rulemakings?

The Basel III NPR and the Standardized Approach NPR would apply to state member banks, bank holding companies domiciled in the United States not subject to the Board’s Small Bank Holding Company Policy

P a g e | 10



Statement (generally, bank holding companies with less than $500 million in consolidated assets), and SLHCs domiciled in the United States.

Consistent with Section 171 of the Dodd- Frank Act, the proposed rulemakings would apply to all SLHCs regardless of asset size.

The Advanced Approaches and Market Risk NPR would generally apply to banking organizations meeting specified thresholds.

In general, the advanced approaches risk based capital rule applies to those banking organizations with consolidated total assets of at least $250 billion or consolidated total on-balance sheet foreign exposures of at least $10 billion (excluding insurance underwriting assets) and their depository institution subsidiaries.

The market risk capital rule generally applies to those banking organizations with aggregate trading assets and trading liabilities equal to at least 10 percent of quarter-end total assets or $1 billion.

Question 3: How are these proposed rulemakings related to the Dodd-Frank Act?

The NPRs are consistent with statutory requirements in the Dodd-Frank Act.

For example, pursuant to section 171 of the Act, the NPRs would establish minimum riskbased and leverage capital requirements for SLHCs, phase out certain capital instruments over a three-year period, and establish new minimum generally applicable capital requirements.

In addition, pursuant to section 939A of the act, the NPRs remove references to, or requirements of reliance on, credit ratings in the Board’s capital rules and replace them with alternative standards of creditworthiness.

Question 4: What are the main changes to the minimum capital requirements?

The proposal includes a new common equity tier 1 minimum capital requirement of 4.5 percent of risk-weighted assets and a common equity tier 1 capital conservation buffer of 2.5 percent of risk-weighted assets.

P a g e | 11



The proposal also increases the minimum tier 1 capital requirement from 4 to 6 percent of risk-weighted assets.

The minimum total riskbased capital requirement would remain unchanged at 8 percent.

The proposal introduces a supplementary leverage ratio that incorporates a broader set of exposures in the denominator measure of the ratio for banking organizations subject to the advanced approaches capital rule.

This supplementary leverage ratio is based on the international leverage ratio in Basel III.

Question 5: What are the main changes related to the definition of capital being proposed?

Capital instruments issued by banking organizations would be subject to a set of strict eligibility criteria that would prohibit, for example, the inclusion in tier 1 capital of instruments that are not perpetual or that permit the accumulation of unpaid dividends or interest.

Trust preferred securities, for example, would be excluded from tier 1 capital, consistent with both Basel III and the Dodd-Frank Act.

Under the Basel III NPR, banking organizations would be subject to generally stricter regulatory capital deductions (the majority of which would be taken from common equity tier 1 capital).

For example, deductions related to mortgage servicing assets, deferred tax assets, and certain investments in the capital of unconsolidated financial institutions would generally be more stringent than those under the current rules.

Question 6: What is the capital conservation buffer and how would it work?

In order to avoid limitations on capital distributions (including dividend payments, discretionary payments on tier 1 instruments, and share buybacks) and certain discretionary bonus payments, under the proposal banking organizations would need to hold a specific amount of common equity tier 1 capital in excess of their minimum risk based capital ratios.

P a g e | 12



The fully phased-in buffer amount would be equal to 2.5 percent of risk-weighted assets.

Question 7: Will the new capital requirements and capital conservation buffer be imposed immediately or will there be a transition period?

The Basel III NPR contains transition provisions designed to give ample time to adjust to the new capital requirements, consistent with the agreement in Basel.

The new minimum regulatory capital ratios and changes to the calculation of risk weighted assets would be fully implemented January 1, 2015.

The capital conservation buffer framework would phase-in between 2016 and 2018, with full implementation January 1, 2019.

Question 8: What is common equity tier 1 capital and why are you proposing a new common equity tier 1 requirement?

Common equity tier 1 capital is a new regulatory capital component that is predominantly made up of retained earnings and common stock instruments (that comply with a series of strict eligibility criteria), net of treasury stock, and net of a series of regulatory capital deductions and adjustments.

Common equity tier 1 capital may also include limited amounts of common stock issued by consolidated subsidiaries to third parties (minority interest). Common equity tier 1 capital is the highest quality form of regulatory capital because of its superior ability to absorb losses in times of market and economic stress.

Question 9: What are the main elements of the Standardized Approach NPR?

It would increase the risk sensitivity of the Board’s general risk-based capital requirements for determining risk-weighted assets (that is, the calculation of the denominator of a banking organization’s risk-based

P a g e | 13



capital ratios) by proposing revised methodologies for determining risk-weighted assets for:

- Residential mortgage exposures by applying a more risk-sensitive treatment that would risk-weight an exposure based on certain loan characteristics and its loan-tovalue ratio;

- Certain commercial real estate credit facilities that finance the acquisition, development, or construction of real property by assigning a higher risk weight;

- Exposures that are more than 90 days past due or on nonaccrual (excluding sovereign and residential mortgage exposures) by assigning a higher risk weight; and

- Exposures to foreign sovereigns, foreign banks, and foreign public sector entities by basing the risk weight for each exposure type on the country risk classification of the sovereign entity.

The NPR would also replace the use of credit ratings for securitization exposures with a formula-based approach.

Additionally, the NPR would provide greater recognition of collateral and guarantees.

However, for most exposures, no changes are being proposed in the NPR.

More specifically, the treatment of exposures to the U.S. government, government-sponsored entities, U.S. states and municipalities, most corporations, and most consumer loans would remain unchanged.

It would introduce disclosure requirements that would apply to banking organizations domiciled in the United States with $50 billion or more in total assets, including disclosures related to regulatory capital.

The changes in the Standardized Approach NPR are proposed to take effect January 1, 2015.

Banking organizations may choose to comply with the proposed requirements prior to that date.

P a g e | 14



Question 10: What are the primary objectives of the Advanced Approaches and Market Risk NPR?

It would revise the advanced approaches risk-based capital rule in a manner consistent with the Dodd-Frank Act by removing references to credit ratings from the securitization framework, requiring an enhanced set of quantitative and qualitative disclosures (especially in regard to definition of capital and securitization exposures), implement a higher counterparty credit risk capital requirement to account for credit valuation adjustments, and propose capital requirements for cleared transactions with central counterparties.

The NPR would incorporate the market risk capital rules into the integrated regulatory capital framework and propose its application to savings and loan holding companies that meet the trading thresholds.

Question 11: How will the Prompt Corrective Action (PCA) framework change as a result of the proposed rulemakings?

Under the proposal, the capital thresholds for the different PCA categories would be updated to reflect the proposed changes to the definition of capital and the regulatory capital minimum ratios.

Likewise, the proposal would augment the PCA capital categories by incorporating a common equity tier 1 capital measure.

In addition, the proposal would include in the PCA framework the proposed supplementary leverage ratio for advanced approaches banking organizations.

Note that the new PCA framework would take effect starting on January 1, 2015, consistent with the full transition of the minimum capital requirements and the Standardized Approach for the calculation of risk weighted assets.

P a g e | 15



NUMBER 2

Chairman Ben S. Bernanke

Economic Outlook and Policy Before the Joint Economic Committee, U.S. Congress, Washington, D.C. June 7, 2012

Chairman Casey, Vice Chairman Brady, and other members of the Committee, I appreciate this opportunity to discuss the economic outlook and economic policy.

Economic growth has continued at a moderate rate so far this year.

Real gross domestic product (GDP) rose at an annual rate of about 2 percent in the first quarter after increasing at a 3 percent pace in the fourth quarter of 2011.

Growth last quarter was supported by further gains in private domestic demand, which more than offset a drag from a decline in government spending.

Labor market conditions improved in the latter part of 2011 and earlier this year.

The unemployment rate has fallen about 1 percentage point since last August; and payroll employment increased 225,000 per month, on average, during the first three months of this year, up from about 150,000 jobs added per month in 2011.

In April and May, however, the reported pace of job gains slowed to an average of 75,000 per month, and the unemployment rate ticked up to 8.2 percent.

This apparent slowing in the labor market may have been exaggerated by issues related to seasonal adjustment and the unusually warm weather this past winter.

But it may also be the case that the larger gains seen late last year and early this year were associated with some catch-up in hiring on the part of

P a g e | 16



employers who had pared their workforces aggressively during and just after the recession.

If so, the deceleration in employment in recent months may indicate that this catch-up has largely been completed, and, consequently, that more-rapid gains in economic activity will be required to achieve significant further improvement in labor market conditions.

Economic growth appears poised to continue at a moderate pace over coming quarters, supported in part by accommodative monetary policy. In particular, increases in household spending have been relatively well sustained.

Income growth has remained quite modest, but the recent declines in energy prices should provide some offsetting lift to real purchasing power.

While the most recent readings have been mixed, consumer sentiment is nonetheless up noticeably from its levels late last year.

And, despite economic difficulties in Europe, the demand for U.S. exports has held up well.

The U.S. business sector is profitable and has become more competitive in international markets.

However, some of the factors that have restrained the recovery persist. Notably, households and businesses still appear quite cautious about the economy.

For example, according to surveys, households continue to rate their income prospects as relatively poor and do not expect economic conditions to improve significantly.

Similarly, concerns about developments in Europe, U.S. fiscal policy, and the strength and sustainability of the recovery have left some firms hesitant to expand capacity.

The depressed housing market has also been an important drag on the recovery.

P a g e | 17



Despite historically low mortgage rates and high levels of affordability, many prospective homebuyers cannot obtain mortgages, as lending standards have tightened and the creditworthiness of many potential borrowers has been impaired.

At the same time, a large stock of vacant houses continues to limit incentives for the construction of new homes, and a substantial backlog of foreclosures will likely add further to the supply of vacant homes.

However, a few encouraging signs in housing have appeared recently, including some pickup in sales and construction, improvements in homebuilder sentiment, and the apparent stabilization of home prices in some areas.

Banking and financial conditions in the United States have improved significantly since the depths of the crisis.

Notably, recent stress tests conducted by the Federal Reserve of the balance sheets of the 19 largest U.S. bank holding companies showed that those firms have added about $300 billion to their capital since 2009; the tests also showed that, even in an extremely adverse hypothetical economic scenario, most of those firms would remain able to provide credit to U.S. households and businesses.

Lending terms and standards have generally become less restrictive in recent quarters, although some borrowers, such as small businesses and (as already noted) potential homebuyers with less-than-perfect credit, still report difficulties in obtaining loans.

Concerns about sovereign debt and the health of banks in a number of euro-area countries continue to create strains in global financial markets.

The crisis in Europe has affected the U.S. economy by acting as a drag on our exports, weighing on business and consumer confidence, and pressuring U.S. financial markets and institutions.

European policymakers have taken a number of actions to address the crisis, but more will likely be needed to stabilize euro-area banks, calm market fears about sovereign finances, achieve a workable fiscal framework for the euro area, and lay the foundations for long-term economic growth.

P a g e | 18



U.S. banks have greatly improved their financial strength in recent years, as I noted earlier.

Nevertheless, the situation in Europe poses significant risks to the U.S. financial system and economy and must be monitored closely.

As always, the Federal Reserve remains prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate.

Another factor likely to weigh on the U.S. recovery is the drag being exerted by fiscal policy.

Reflecting ongoing budgetary pressures, real spending by state and local governments has continued to decline.

Real federal government spending has also declined, on net, since the third quarter of last year, and the future course of federal fiscal policies remains quite uncertain, as I will discuss shortly.

With regard to inflation, large increases in energy prices earlier this year caused the price index for personal consumption expenditures to rise at an annual rate of about 3 percent over the first three months of this year.

However, oil prices and retail gasoline prices have since retraced those earlier increases.

In any case, increases in the prices of oil or other commodities are unlikely to result in persistent increases in overall inflation so long as household and business expectations of future price changes remain stable.

Longer-term inflation expectations have, indeed, been quite well anchored, according to surveys of households and economic forecasters and as derived from financial market information.

For example, the five-year-forward measure of inflation compensation derived from yields on nominal and inflation-protected Treasury securities suggests that inflation expectations among investors have changed little, on net, since last fall and are lower than a year ago.

P a g e | 19



Meanwhile, the substantial resource slack in U.S. labor and product markets should continue to restrain inflationary pressures.

Given these conditions, inflation is expected to remain at or slightly below the 2 percent rate that the Federal Open Market Committee (FOMC) judges consistent with our statutory mandate to foster maximum employment and stable prices.

With unemployment still quite high and the outlook for inflation subdued, and in the presence of significant downside risks to the outlook posed by strains in global financial markets, the FOMC has continued to maintain a highly accommodative stance of monetary policy.

The target range for the federal funds rate remains at 0 to 1/4 percent, and the Committee has indicated in its recent statements that it anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate at least through late 2014.

In addition, the Federal Reserve has been conducting a program, announced last September, to lengthen the average maturity of its securities holdings by purchasing $400 billion of longer-term Treasury securities and selling an equal amount of shorter-term Treasury securities.

The Committee also continues to reinvest principal received from its holdings of agency debt and agency mortgage-backed securities (MBS) in agency MBS and to roll over its maturing Treasury holdings at auction.

These policies have supported the economic recovery by putting downward pressure on longer-term interest rates, including mortgage rates, and by making broader financial conditions more accommodative.

The Committee reviews the size and composition of its securities holdings regularly and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.

The economy's performance over the medium and longer term also will depend importantly on the course of fiscal policy.

Fiscal policymakers confront daunting challenges. As they do so, they should keep three objectives in mind.

P a g e | 20



First, to promote economic growth and stability, the federal budget must be put on a sustainable long-run path.

The federal budget deficit, which averaged about 9 percent of GDP during the past three fiscal years, is likely to narrow in coming years as the economic recovery leads to higher tax revenues and lower income support payments.

Nevertheless, the Congressional Budget Office (CBO) projects that, if current policies continue, the budget deficit would be close to 5 percent of GDP in 2017 when the economy is expected to be near full employment.

Moreover, under current policies and reasonable economic assumptions, the CBO projects that the structural budget gap and the ratio of federal debt to GDP will trend upward thereafter, in large part reflecting rapidly escalating health expenditures and the aging of the population.

This dynamic is clearly unsustainable.

At best, rapidly rising levels of debt will lead to reduced rates of capital formation, slower economic growth, and increased foreign indebtedness.

At worst, they will provoke a fiscal crisis that could have severe consequences for the economy.

To avoid such outcomes, fiscal policy must be placed on a sustainable path that eventually results in a stable or declining ratio of federal debt to GDP.

Even as fiscal policymakers address the urgent issue of fiscal sustainability, a second objective should be to avoid unnecessarily impeding the current economic recovery.

Indeed, a severe tightening of fiscal policy at the beginning of next year that is built into current law--the so-called fiscal cliff--would, if allowed to occur, pose a significant threat to the recovery.

Moreover, uncertainty about the resolution of these fiscal issues could itself undermine business and household confidence.

Fortunately, avoiding the fiscal cliff and achieving long-term fiscal sustainability are fully compatible and mutually reinforcing objectives.

P a g e | 21



Preventing a sudden and severe contraction in fiscal policy will support the transition back to full employment, which should aid long-term fiscal sustainability.

At the same time, a credible fiscal plan to put the federal budget on a longer-run sustainable path could help keep longer-term interest rates low and improve household and business confidence, thereby supporting improved economic performance today.

A third objective for fiscal policy is to promote a stronger economy in the medium and long term through the careful design of tax policies and spending programs.

To the fullest extent possible, federal tax and spending policies should increase incentives to work and save, encourage investments in workforce skills, stimulate private capital formation, promote research and development, and provide necessary public infrastructure.

Although we cannot expect our economy to grow its way out of federal budget imbalances without significant adjustment in fiscal policies, a more productive economy will ease the tradeoffs faced by fiscal policymakers.

Thank you. I would be glad to take your questions.

P a g e | 22



NUMBER 3

Consultation paper on Draft Implementing Technical Standards on supervisory reporting requirements for liquidity coverage and stable funding 07 June 2012 The European Banking Authority (EBA) launched today a consultation on Draft Implementing Technical Standards (ITS) on supervisory reporting requirements for liquidity coverage and stable funding. These ITS, which will be part of the EU single rulebook, intend to specify the main features (formats, frequencies, IT solutions) of prudential reporting to be applied by financial institutions in Europe. The consultation runs until 27 August 2012. These ITS will become part of the general supervisory reporting framework. In this respect, they are an addition to the draft ITS text proposed in the Consultation Paper on supervisory reporting for institutions (CP50) published on 20 December 2011 and need to be read in conjunction with them.

Main features of the ITS These ITS aim at providing national authorities with harmonized information on their liquid assets, inflows and outflows and their stable

P a g e | 23



sources of funding using uniform reporting formats developed by the EBA.

Against this background, this consultation paper puts forward proposals regarding the reporting requirements for both liquidity coverage and stable funding.

The purpose of this monitoring is two-fold:

(i) To inform the economic impact assessment of the liquidity requirements the EBA is asked to perform during the monitoring period, and

(ii) To enable competent authorities to monitor institutions’ compliance with the liquidity requirements once they have been introduced as binding minimum standards.

The scope and level of application of these ITS are in line with the Capital Requirements Regulation (CRR) text.

The latter provides for the liquidity coverage reporting to be done at least monthly and the stable funding reporting at least quarterly.

These ITS have been developed on the basis of the templates for liquidity reporting used by the EBA in compiling the Basel III monitoring exercise as well as on the COREP and FINREP guidelines.

They also build on voluntary reporting exercises conducted predominantly by larger institutions.

Next steps These draft ITS have been developed on the basis of the European Commission’s legislative proposals for the CRR/CRD IV.

Following the end of the consultation period, and to the extent that the final text of the CRR changes before the adoption of the ITS, the EBA will adapt its draft ITS accordingly to reflect any developments.

The CRR also mandates the EBA to develop additional liquidity monitoring metrics to provide competent authorities with a comprehensive view of institutions’ liquidity risk profiles.

P a g e | 24



The EBA is currently working on these metrics and will launch a public consultation in due course, depending on the timeline that will be adopted in the CRR.

As stated above, the information collected under these ITS will be used to inform the EBA’s impact assessment on the introduction of the liquidity requirements.

The EBA will disclose the methodology it intends to use for this assessment later this year.

A separate consultation on a data point model containing all the relevant technical specifications necessary for developing an IT reporting format will be published in the second half of 2012.

Based on the CRR proposals and these ITS, institutions are required to comply with the new reporting requirements as of 1 January 2013.

In the current timeline for the implementation of the CRR/CRD IV, the first regular reporting period is expected to be January 2013.

Notes to editors

1. The CRR/CRD IV package (the so-called Capital Requirements Regulation - ‘CRR’- and the so-called Capital Requirements Directive – ‘CRD’) sets out prudential requirements which are expected to be applicable as of 1 January 2013.

The package translates in European law international standards on bank capital agreed at the G20 level (most commonly known as the Basel III agreement).

One of the major achievements will be the creation of a Single Rule Book - a set of rules directly applicable in all EU member states - that will improve both transparency and enforcement in the EU banking sector.

2. Draft ITS are produced in accordance with Article 15 of EBA regulation which provides for their adoption by means of regulations or decisions.

P a g e | 25



According to EU law, EU regulations are binding in their entirety and directly applicable in all Member States.

This means that, on the date of their entry into force, they become part of the national law of the Member States and that their implementation into national law is not only unnecessary but also prohibited by EU law, except in so far as this is expressly required by them.

EBA Consultation Paper on Draft Implementing Technical Standards on Supervisory reporting requirements for liquidity coverage and stable funding, London, 07 June 2012 I. Responding to this Consultation EBA invites comments on all matters in this paper Comments are most helpful if they: - respond to the question stated;

- indicate the specific question to which the comments relates;

- contain a clear rationale;

- provide evidence to support the views expressed /rationale proposed; and

- describe any alternative regulatory choices EBA should consider

Please send your comments to the EBA by 27 August 2012

Publication of responses All contributions received will be published following the close of the consultation, unless you request otherwise.

P a g e | 26



Please indicate clearly and prominently in your submission any part you do not wish to be publically disclosed. A standard confidentiality statement in an e-mail message will not be treated as a request for non-disclosure. A confidential response may be requested from us in accordance with the EBA’s rules on public access to documents. We may consult you if we receive such a request. Any decision we make not to disclose the response is reviewable by the EBA’s Board of Appeal and the European Ombudsman.

II Executive Summary The CRD IV proposals which are expected to be applicable as of 1.1.2013, set out prudential requirements for EEA institutions. The CRR contains, in a number of Articles, specific mandates which require the EBA to develop draft Implementing Technical Standards (henceforth ITS) related to supervisory reporting requirements (Articles 95, 96, 383, 403 and 417 of CRR). These ITS will be part of the single rulebook enhancing regulatory harmonisation in Europe with the particular aim of specifying uniform formats, frequencies and dates of prudential reporting as well as IT solutions to be applied by institutions and, as the case may be, investment firms in Europe. The draft ITS are intended to be put forward as one integrated draft Regulation and this consultation paper consequently supplements EBA Consultation Paper CP50 on supervisory reporting for institutions, published on 20 December 20112. The draft ITS text proposed in the present document is an addition to the draft ITS text proposed in that CP and needs to be read in conjunction with it.

P a g e | 27



The rationale behind a single draft Regulation is that it is beneficial that reporting requirements are grouped together in one legal act to facilitate a comprehensive view, improved understanding and compact access to them by legal or natural persons subject to the obligations laid down herein. In the case of monitoring the implementation of new standards, the benefits of standardised data collection and IT solutions will reduce the burden on institutions and allow a more accurate examination of the impact of such standards. This consultation paper puts forward proposals regarding the reporting requirements according to the mandate of the EBA provided in Article 481 of the CRR to monitor and evaluate the liquidity reporting requirements made in accordance with Article 403(1). This CP is not consulting on a number of items not specified in the CRR. Such matters include, but are not limited to, the calibration of the liquidity standards, the definition of liquid assets, the scope of application and frequency of reporting. Please note that the EBA has developed the present draft ITS based on the European Commission’s legislative proposals for the CRR/CRD IV. Following the end of the consultation period, and to the extent that the final text of the CRR changes before the adoption of the ITS, the EBA will adapt its draft ITS accordingly to reflect any developments. Following the close of the consultation on dd.mm, the EBA will assess the responses received, along with any relevant changes in the final CRR legislative text.

Main features of this ITS The CRR specifies a new liquidity coverage requirement that would be applicable to all credit institutions no earlier than 1.1.2015, following a delegated act by the EC.

P a g e | 28



Article 481 requires the EBA to, amongst other things, monitor and evaluate the reports submitted in accordance with this ITS and to report to the EC whether a specification of the general liquidity requirement would “have a material detrimental impact on the business and risk profile of Union institutions or on financial markets or the economy and bank lending....”. With regard to a stable funding requirement, the article requires the EBA to submit a report to the EC on whether and how a stable funding requirement would be appropriate, together with a similar assessment on the impact on Union institutions, financial markets and bank lending. The ITS has been developed on the basis of templates for liquidity reporting used by the EBA in compiling its “Report on the Basel III monitoring exercise” which were in turn based on those in the Quantitative Impact Study (QIS) carried out by the Basel Committee on Banking Supervision (BCBS), adapted for the purposes of the requirements put forward by the CRR. The template consequently builds on the experience gained in a number of Member States with voluntary reporting predominantly by larger institutions. In addition the EBA has conducted a small number of voluntary reporting exercises for a broader range of institutions to increase familiarity with the liquidity coverage requirement and to improve data quality. The ITS has been developed, as much as possible, on the basis of the COREP and FINREP guidelines, given that these have been implemented already in various Members States and have been proved in practice to improve convergence in the field of supervisory reporting. However, there is a very limited overlap of data requirements with existing data collected, as is commonly the case with liquidity reporting. The scope and level of application of this ITS follows the scope and level of application of the CRR.

P a g e | 29



As mentioned above, the EBA is mandated to follow the legislative text. The reporting frequency will be not less than monthly for the liquidity coverage reporting and not less than quarterly for the reporting of the stable funding as required by the CRR.

Timing of ITS development and application date Based on the EC proposals and this ITS, institutions are required to comply with new reporting requirements according to Titles II and III as of 1 January 2013. From this date onwards competent authorities will have to check

institutions‟ compliance with the afore-mentioned regular reporting requirements and reporting instructions belonging to the reporting templates. The first regular reporting period for the liquidity reporting according to Title II is expected to be January 2013, with the first reporting reference date being end January 2013 The reporting of the stable funding according to Title III is expected to commence in the quarter of 2013 with the first reporting reference date being end-March 2013 2012.

Q1: Are the proposed dates for first remittance of data, i.e. end of January and end of March 2013, feasible?

The EBA intends to finalise the draft ITS and endorse it for submission to the EC by November 2012. The proposed submission dates assume that a final CRR will be available beforehand. While this is a very short period of time before reporting is legally required, in the case of many large institutions, they will have been reporting on a voluntary basis for an extended period of time, and other institutions can

P a g e | 30



plan on the basis of final legislative text which should be available at a much earlier date. It is important to keep in mind that timelines contained in the CRR might change which may impact the above dates related to the ITS. In any case, EBA will adapt its draft ITS according to the final version of the CRR text before submitting it to the EC for adoption.

III. Background and rationale Draft ITS on Liquidity reporting On July 20th 2011, the EC published legislative proposals on a revision of the CRD which seeks to apply the Basel III framework in the EU. These proposals have recast the contents of the CRD into a revised CRD and a new CRR - which are colloquially referred to as the CRR proposals. These are currently being finalised by EU legislators (Council and European Parliament) in the framework of the co-decision procedure. In anticipation of the finalisation of the legislative texts for the CRR, the EBA has developed the draft ITS in accordance with the mandate contained in Article 403.1 (a) of the draft CRR endorsed by the EC in July 2011. This approach, to draft the ITS on the basis of the EC’s endorsed text was deemed a more efficient way forward, as it will allow banks to start evaluating the potential challenges of the new liquidity reporting framework (introduced as a legal requirement for the first time in the CRR proposals) pending finalisation of the co-decision process. In any case, the EBA will adapt its draft ITS according to the final version of the CRR text before submitting them to the EC for adoption. The final ITS on liquidity reporting and reporting on stable funding will be included in the ITS on supervisory reporting requirements for institutions.

P a g e | 31



The nature of ITS under EU law These draft ITS are produced in accordance with Article 15 of EBA regulation. According to Article 15(4) of EBA regulation, they shall be adopted by means of regulations. According to EU law, EU regulations are binding in their entirety and directly applicable in all Member States. This means that, on the date of their entry into force, they become part of the national law of the Member States and that their implementation into national law is not only unnecessary but also prohibited by EU law, except in so far as this is expressly required by them. Shaping these rules in the form of a Regulation would ensure a level-playing field by preventing diverging national requirements and would ease the cross-border provision of services.

Background and regulatory approach followed in the draft ITS

In the context of domestic-based liquidity regimes within the European Union, liquidity risk regulatory and reporting frameworks currently in use in the various Member States are heterogeneous. This led to inefficient outcomes and increased costs for cross-border institutions and national supervisory authorities, especially during the events of the 2007-2008. To tackle such regulatory shortcomings which emerged during the crisis and taking account of the new liquidity regulatory framework proposed by the BCBS in December 20106, the EC’s proposed CRR envisages introducing a liquidity coverage requirement from 1.1.2015 following an observation and a review period. Such a requirement aims to improve short term resilience of the liquidity risk profile of institutions. According to the proposed CRR, the

P a g e | 32



Commission will also consider introducing a stable funding requirement in 2018 following an observation and review period, to address funding problems arising from maturity mismatches. To this aim, institutions are requested to report to national authorities the elements needed to monitor their liquid assets, inflows and outflows and their stable sources of funding according to Title II (Liquidity Reporting), Annex III (Items subject to supplementary reporting of liquid assets) and Title III (Reporting on stable funding) of the CRR, using uniform reporting formats developed by EBA. With that in mind, the present ITS has been developed to provide national authorities with harmonised information on institution’s liquidity risk profile, taking into account the nature, scale and complexity of institutions' activities. As the ITS on liquidity reporting will become part of the general supervisory reporting framework requirements, following the introduction of liquidity requirements, formats have been developed with the aim to ensure consistency where allowed by the CRR proposed text. Under the proposed CRR text, EBA is also requested to monitor and evaluate the reports made by institutions and, after consulting the ESRB, to report annually and for the first time by 31 December 2013 to the Commission on the following issues: (a) Whether the general liquidity coverage requirement in Article 401 CRR is likely to have a detrimental impact on the business and risk profile of Union institutions or on financial markets or then economy and bank lending (Article 481(1) CRR);

(b) Appropriate uniform definitions of high and extremely high liquid and credit quality of transferable assets for the purposes of Article 404 CRR. By 31 December 2015, EBA is also requested to report to the Commission whether and how it would be appropriate to ensure that institutions use stable sources of funding, including an assessment of impact on the business and risk profile of Union institutions or on financial markets or

P a g e | 33



the economy and bank lending (Art. 481(3) CRR). Therefore, information included in the ITS on liquidity reporting will also be useful to EBA in reporting on the impact of the general liquidity coverage requirement and the appropriateness of a stable funding requirement. However, this draft ITS will not help the EBA determine whether certain transferable assets are of high or extremely high liquidity and credit quality, as this an assessment independent of whether individual institutions are holding such assets.

Level of application and frequency of liquidity coverage reporting and the reporting on stable funding The scope and level of application of the ITS follows the scope and level of application of the CRR, i.e. it applies - on a consolidated basis (Article 10(3) CRR): to EU parent credit institutions and investment firms and to credit institutions and investment firms controlled by an EU parent financial holding company or by an EU parent mixed financial holding company; - on an individual basis (Article 5(4)) : to all credit institutions and investment firms that are authorised to provide the investment services listed in points 3 and 6 of section A of Annex I to Directive 2004/39/EC. However, according to Article 7 of the proposed CRR text, competent authorities will be allowed to waive in full or in part the application of Article 401 (Liquidity Coverage Requirement) to a parent institution and to all or some of its subsidiaries, if they fulfil a set a predefined conditions, including if the parent institution complies on a consolidated basis with the obligation set forth in Article 401 and 403 (Article 7(1) (a)). The frequency of the reporting requirements are aligned with those envisaged in the draft CRR text: not less than monthly for the liquidity reporting and not less than quarterly for the reporting on stable funding.

P a g e | 34



Both the frequency and the scope of application of the ITS will be revised to be aligned to final text of the CRR, especially regarding the application of liquidity requirements to investment firms (Article 480(2) of CRR).

IV. Draft Implementing Technical Standards on Supervisory reporting requirements for liquidity coverage reporting and reporting on stable funding In between the text of the draft ITS that follows, further explanations on specific aspects of the proposed text are occasionally provided, which either offer examples or provide the rationale behind a provision, and/or set out specific questions for the consultation process. Where this is the case, this explanatory text appears in a framed text box. Structure of the draft ITS CHAPTER 1 Subject matter, Scope and Definitions CHAPTER 2 Reporting reference and remittance dates CHAPTER 3 Format and frequency of reporting on liquidity and on stable funding Section 1 Format and frequency of reporting on liquidity Section 2 Format and frequency of reporting on stable funding CHAPTER 4 IT solutions for the submission of data from institutions to competent authorities CHAPTER 5 Final provisions Annex I Liquidity coverage reporting template Annex II Stable funding reporting template Annex III Instructions liquid assets

P a g e | 35



Annex IV Instructions inflows Annex V Instructions outflows Annex VI Instructions Stable funding Draft Commission Implementing Regulation (EU) No XX/2012 of XX Month 2012 laying down implementing technical standards with regard to supervisory reporting of institutions according to the (proposal for a ) European Parliament and Council Regulation (EU) No [xx] of [date] on prudential requirements for credit institutions and investment firms.

CHAPTER 1 Subject matter, Scope and Definitions Article 1 Subject matter and scope 1. This Regulation lays down uniform requirements that all institutions subject to the Regulation of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms (hereinafter “CRR”) must meet relating to the submission of supervisory data to competent authorities for the following areas: a) liquidity reporting requirements as defined in Part III, Title II of Regulation xx/xx ; b) supplementary reporting of liquid assets as defined in Annex III of Regulation xx/xx ; c) stable funding reporting requirements as defined in Part III, Title III of Regulation xx/xx ; d) additional liquidity monitoring metrics as defined in Part III, Title II of Regulation xx/xx ; e) IT solutions as defined in Part III, Title II of Regulation xx/xx .

P a g e | 36



Explanatory text for consultation purposes The draft CRR also requires the EBA to develop a draft ITS to cover additional monitoring metrics by Jan 1, 2013. The EBA intends to launch a separate consultation on this matter in autumn 2012. The data point model will be published for consultation in the third quarter of 2012.

2. The liquidity reporting requirements and the supplementary reporting of liquid assets specified in this regulation apply until the delegated act for a liquidity coverage requirement as referred to in Article 444 of Regulation xx/xx has entered in force.

Some supplementary information is asked in the template to increase data coverage.

At certain times the EBA may propose to change, amend or alter the reporting specified in this Regulation in order to inform the report required by Article 481.

This does not prejudge the future calibration of the ratio.

3. The stable funding reporting requirements specified in this regulation apply until a legislative proposal for a stable funding requirement as referred to in Article 481 (3) of Regulation xx/xx would enter in force.

4. The reporting shall be done on an individual basis (Article 5) and on a consolidated basis (Article 10) as defined in Regulation xx/xx.

Individual reporting may only be waived according to the procedures outlined in Articles 7 and 19.

These Articles make clear the respective roles of the EBA and the relevant competent authorities in granting any such waivers.

P a g e | 37



Article 2 Definitions 1. For the purpose of this Regulation, the definitions provided by Regulation xx/xx shall apply, in particular those included in Article 4 and 400 of the CRR shall apply.

2. For the purpose of this Regulation, the scope and level of application according to Part 1, Title II of Regulation xx/xx shall apply. Explanatory text for consultation purposes In addition, according to Article 403.2, institutions are required to report items separately if they are indexed to a currency where the institution has significant liquidity risk or such currency is the lawful currency of a jurisdiction where they have a significant branch. For the purposes of harmonising the definition of a currency where an institution has significant liquidity risk the EBA proposes that this should be limited to those currencies which comprise more than 5% of an institution’s liabilities.

Q2: Do respondents agree with this proposal for defining significant currency? The reporting for investment firms should be done following the requirements of Part 1, Title II until the eventual implementation of any legislative proposal referred to in Article 480(2) of CRR.

CHAPTER 2 Reporting reference and remittance dates

Article 3

1. The reporting reference dates shall be:

- Monthly reporting: on the last day of each month;

P a g e | 38



- Quarterly reporting: 31 March, 30 June, 30 September and 31 December.

Article 4

Reports shall be submitted by institutions to competent authorities by close of business on the 15th calendar day after the reporting reference date specified in Article 3.

1. If the remittance day is a public holiday, Saturday or Sunday, reporting requirement shall be transmitted on the following working day.

2. The above remittance dates concern the submission of unaudited figures which are figures that have not been assessed by external auditors. Where applicable, audited figures implying changes in already reported data shall be submitted as soon as available.

In addition, any errors in the submitted reports shall be corrected by the reporting institution by submitting the necessary revisions to the relevant competent authority as soon as possible.

Explanatory text for consultation purposes The proposed remittance period is 15 days for the monthly reporting and 15 days for the quarterly reporting.

Q3: Is the proposed remittance period of 15 days feasible? CHAPTER 3 Format and frequency of reporting on liquidity and on stable funding Section 1 Format and frequency of reporting on liquidity coverage requirement Article 5

P a g e | 39



1. Information submitted pursuant to the templates set out in Annex I (liquidity coverage reporting template) and according to the instructions in Annex III, IV and V shall be reported on a monthly basis.

2. Institutions shall have the operational capacity to increase the frequency to weekly or even daily in stressed situations at the discretion of the competent authorities. The items listed for reporting in the template include all the necessary items specified in Articles 400 to 415 of the CRR. Certain additional items are included to help institutions and supervisors check data quality and to inform other relevant policy options, such as intra-group treatments.

Q4: Are there additional sub-categories of inflows and outflows that are consistent with the specification of the liquidity coverage requirement in the CRR and would inform policy options that should be included in the template and accordingly reported? With respect to the reporting of liquid assets according to Annex III and Article 404, in the absence of a harmonised definition, institutions are permitted to use internal definitions for the purposes of liquidity reporting. The CRR also permits competent authorities to give guidance institutions shall follow in identifying assets of high and extremely high liquidity and credit quality. It is not practical in the context of a harmonized reporting framework for institutions to have complete freedom to define such assets, both from the point of view of having common IT solutions and data comparability across submissions. Therefore the EBA is using this consultation to ask institutions what additional data on asset class holdings should be collected.

P a g e | 40



The most significant amendments to the CRR in respect of liquidity reporting proposed by the co-decision bodies are to include equities, gold and high-quality residential mortgage-backed securities or state-guaranteed bank debt. It should be noted that collecting data on additional assets does increase the complexity of the template given that the inflow and outflow rates on repo and reverse repo transactions are varied according to the liquidity category which each asset belongs to in accordance with Articles 410 and 413. The responses to the following question will be taken into account together with any mandated inclusions or exclusions of assets in the final version of the CRR for the purposes of giving the guidance to institutions permitted in Article 404.

Q5: Fur the purposes of providing guidance as to transferrable securities of high and extremely high credit and liquidity quality, what additional assets, if any, should the ITS collect? Section 2 Format and frequency of reporting on stable funding

Article 5 Format and frequency of reporting on stable funding

1. Information submitted pursuant to the template set out in Annex II (Stable funding reporting requirement) and according to the instructions in Annex VI shall be reported on a quarterly basis. Explanatory text for consultation purposes The scope, definitions, reporting reference and remittance dates as set out in Chapters X and X apply. 2. The information to be reported are the following:

P a g e | 41



a) information on items providing stable funding according to Article 414(1) of Regulation xx/xx ;

b) information on items requiring stable funding according to Article 415(1) of Regulation xx/xx . Explanatory text for consultation purposes The information gathered will help to compile the report to the Commission on whether and how it would be appropriate to ensure that institutions use stable sources of funding according to the Article 481§3 of the CRR in order to promote more medium and long-term funding of the assets and activities of banking organisations. The amount of stable funding required of a specific institution should be a function of the liquidity characteristics of various types of assets held, off-balance sheet contingent exposures incurred and/or activities pursued by the institution.

Q6: Do respondents agree that the template captures the requirement of the draft CRR on reporting of stable funding?

Where applicable, the information required on stable funding will have to be presented in five buckets (within 3 months, between 3 and 6 months, between 6 and 9 months, between 9 and 12 months and after 12 months).

V. Accompanying documents a. Draft Impact Assessment Introduction Article 403(3)(a) of the CRR requires the EBA to develop draft Implementing Technical Standards (ITS) relating to the reporting on liquidity coverage and stable funding. As per Article 15(1) second subparagraph of the EBA Regulation (Regulation (EU) No 1093/2010of the European Parliament and of the Council), any draft technical standards developed by the EBA will have to be accompanied by a separate note on Impact Assessment (IA) which

P a g e | 42



analyses the „the potential related costs and benefits (unless such analyses are disproportionate in relation to the scope and impact of the draft ITS concerned or in relation to the particular urgency of the matter). This IA aims to provide the reader with an overview of findings as regards the problems and options identified and their potential impact. This IA deals with the incremental impact of the EBA’s draft ITS to determine the uniform templates, the instructions on how to use this template, the frequencies and remittance days for reporting. Throughout the project the EBA has closely followed the work of international organisations dealing with related topics, in particular the Basel Committee on Banking Supervision in charge of monitoring Basel III requirements.

Problem definition Article 403(3)(a) CRR mandates the EBA to develop draft implementing technical standards to specify uniform formats with associated instructions, frequencies, dates and delays for reporting of the liquidity coverage and stable funding requirements. These reports will enable authorities to monitor institutions compliance with the two requirements once they have become binding. During the monitoring period, the collected information will inform the economic impact assessment the EBA is mandated to perform under Article 481(1), as well as the report on appropriate uniform definitions of liquid assets according to Article 481(2). Article 403 CRR requires institutions to report items for the purpose of monitoring compliance with the liquidity requirements and also stipulates that the reporting frequency shall not be less than monthly for the liquidity coverage requirement and quarterly for reporting on stable funding.

P a g e | 43



On the contrary, the CRR gives discretion for the EBA to propose options on (i) whether to integrate liquidity reporting in the common reporting framework (COREP), (ii) the level of detail for some of the reporting items, (iii) remittance dates and (iv) reporting of significant currencies.

Timing of ITS development and application date Institutions are expected to comply with the new CRR Requirements from January 2013. Sufficient time for implementing ITS requirements is essential to ensure data availability and quality in order for competent authorities to perform their tasks. The CRR applies to institutions regardless of their size, risk profile, etc. The appropriate balance between the required level of detail of the submitted information and the nature, scale and complexity of institutions activities is imperative in the consideration of reporting formats and frequencies.

Objectives of the technical standards The objective of the draft ITS is to determine uniform templates and instructions on how to use this template, the frequencies and dates of reporting as well as IT solutions for the purposes of liquidity reporting requirements. This draft ITS will assist institutions in fulfilling their reporting requirements under Article 403(1) CRR. Additional liquidity monitoring

P a g e | 44



metrics according to Article 403(3)(b) CRR will be consulted at a later stage. It is important that the relevant data is available for the review of the appropriateness of the liquidity coverage and stable funding requirements in 2015 and 2018, respectively.

Policy proposals Given that the uniform liquidity reporting requirements are being introduced for the first time in the EU, an appropriate reporting template needs to be developed. I. Including the ITS as an Annex to the COREP reporting standard At this stage reporting is for the observation period for the liquidity standards, rather than a final standard. In this light, two alternatives have been considered: (i) Following an approach chosen for the QIS based on a stand-alone Excel template, or

(ii) including liquidity risk reporting in the common reporting framework.

Option I Advantages: - Keeping full flexibility for future adaptions after the ratios have been finally calibrated. Disadvantages: -No established reporting infrastructure, -No link to bank identifiers and other data which would be useful for the economic impact assessment to be performed under Article 481 (1). Option 2

P a g e | 45



Advantages: - Harmonised methodology to collect the data, - the ability to cross-reference to other metrics, - stablished infrastructure to analyse and manipulate the data. Disadvantages: -Any changes to the template as a result of the observation period would need to take place within the COREP timetable. Based on the above reasoning it is concluded that option 2 is more beneficial and hence integration into COREP is proposed.

II. Submission time

The time between reporting date and submission is not specified in CRR. The CP proposes as a baseline that reporting dates should be at month end for LCR and quarter end for NSFR, and that the submission time should be 15 calendar days. This would take into consideration that the LCR incorporates a 30 days forward looking stress scenario, i.e. ideally remittance should occur before this period ends. EBA encourages stakeholders to comment on the feasibility of the proposed submission time.

III. Level of detail for certain reporting items for the liquidity coverage requirement

In the absence of an adopted CRR there has been no finalized list of liquid assets to be reported yet. Moreover, according to positions of both the ECOFIN and the European Parliament, the EBA shall collect information on certain assets for the

P a g e | 46



purpose of its economic impact assessment even in cases where they would not meet certain criteria, e.g. central bank eligibility. For the purposes of this consultation, the EBA proposes the following: The template includes those assets that were specifically listed in the Commission proposal. Respondents are explicitly asked to suggest additional asset classes to be included in the reporting for the purpose of the economic impact assessment, and without prejudice to their eligibility after final calibration of the LCR.

IV. Reporting in significant currencies

Article 405(g) CRR on the operational requirements for holdings of liquid assets requires that „the denomination of the liquid assets is consistent with the distribution by currency of liquidity outflows after the deduction of capped inflows. Without collecting information on collecting the liquidity coverage requirement by currency, the EBA could not measure the impact of this proposal.

Likely economic impacts It is recognised that the reporting of liquidity requirements will incur operational and compliance costs for institutions and competent authorities. It is not envisaged that these costs would be over and above those incurred if the liquidity reporting requirements were constructed in an alternative manner. In fact, if it was proposed to require reporting outside the scope of COREP, presumably this would increase operational costs in the long-term.

P a g e | 47



The proposal to rely on the COREP reporting framework is aimed at minimising the incremental economic impact of the liquidity reporting requirements for institutions and competent authorities.

b. Overview of questions for public consultation Q1: Are the proposed dates for first remittance of data, i.e. end of January and end of March2013 feasible? Q2: Do respondents agree with this proposal for defining significant currency? Q3: Is the proposed remittance period of 15 days feasible? Q4: Are there additional sub-categories of inflows and outflows that are consistent with the specification of the liquidity coverage requirement in the CRR and would inform policy options that should be reported? Q5: Fur the purposes of providing guidance as to transferrable securities of high and extremely high credit and liquidity quality, what additional assets, if any, should the ITS collect? Q6: Do respondents agree that the template captures the requirement of the draft CRR on reporting of stable funding?

P a g e | 48



NUMBER 4

Opening Remarks

DATE: June 7, 2012

SPEAKER: Jeanette M. Franzel, Board Member

EVENT: PCAOB Forum on Auditing in the Small Business Environment

LOCATION: Minneapolis, MN

Welcome to the PCAOB Forum on Auditing in the Small Business Environment.

I am Jeanette Franzel, Board Member at the Public Company Accounting Oversight Board.

I will be the host and moderator today. Before I go further, I must tell you that the views I express today are my personal views and do not necessarily reflect the views of the Board, any other Board member, or the staff of the PCAOB.

This is our eighth year of holding forums in cities across the United States on auditing in the small business environment.

During 2011, the Board held seven of these forums across the U.S., reaching more than 750 participants.

The goal of these meetings is to create an opportunity for discussion and dialogue between PCAOB and auditors in smaller firms by providing opportunities for auditors to learn about the PCAOB's work, and to provide feedback and ask questions about PCAOB activities-- including inspections, auditing standards and guidance, and current projects and priorities of the Board.

So please participate. We welcome your input and questions.

P a g e | 49



The statutory mission of the PCAOB is to oversee audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.

The PCAOB is also charged with overseeing the audits of broker-dealer compliance reports under federal securities laws to promote investor protection.

We fulfill our mission through our inspections, our authority to set auditing standards, and our enforcement efforts.

We are going to be talking today about those programs through presentations and case studies, with special emphasis on some of the issues facing smaller firms.

Today, we will cover a number of updates on the auditing environment, audit standard-setting activities, related SEC activities, and a review of common financial reporting issues facing smaller issuers.

In addition, we will spend a considerable amount of time discussing practical aspects of auditing through our case studies involving the top ten inspection findings and the relevant auditing standards.

Finally, we will cover the process for remediation of deficiencies detected during PCAOB inspections.

In 2011, there were 476 domestic firms that issued audit opinions on the financial statements of 100 or fewer issuers, making them subject to PCAOB inspections every three years, which is why we sometimes refer to these firms as "triennial firms."

Of those firms, 287, or 60 percent, issued audit opinions on between 1 and 5 issuers.

The triennial firms include a broad range of firm size, structure, and practice, including sole proprietorships with small staffs to large network firms with dozens of partners and multiple offices.

These firms audit public companies of all types and sizes, including shell companies, small manufacturing and financial services companies, and new startups, with market caps in the tens of millions of dollars, and

P a g e | 50



larger companies that encompass multiple industries with market caps in the billions of dollars.

In the aggregate, triennial firms audit the financial statements of issuers that represent $110 billion to $120 billion in U.S. market capitalization (based on data as of December 31, 2011).

Ensuring that these firms consistently perform high quality audits is important to the Board as well as the investing public.

Auditors have been given an important and trusted role in the capital markets, and, from time to time, that role has been re-examined by the government and the profession itself.

Such examination is appropriate, given the auditors' role of providing assurance to investors, lenders and others that an audited company's financial statements and related disclosures fairly present the institution's financial results in conformity with applicable accounting and disclosure standards and rules.

Clearly, reliable financial statements with auditor assurance are important to your clients, their investors, and the broader financial markets.

A strong, high quality audit function is essential to the effective functioning of the capital markets, which in turn, affects the well-being of American families.

More than half of American households invest their savings in securities to provide for retirement, education, and other goals.

It is encouraging that we have heard from many stakeholders who believe that audit quality has improved since the passage of the Sarbanes-Oxley Act and the establishment of the PCAOB.

But there is still more that needs to be done.

The Board is concerned by the number of serious deficiencies found in our 2010and 2011 inspections.

Our inspection findings spiked in the 2010 inspections for the annually and triennially inspected firms.

P a g e | 51



Those inspections generally looked at audits of 2009 financial statements.

Inspection findings have remained at a relatively high level for the 2011 inspections.

Later this morning, we will discuss our "Top 10 Common Inspection Findings."

It is interesting to note that there is a high degree of overlap with the top 10 accounting matters identified by the SEC.

These include matters that are relatively basic as well as issues that are very complex.

Our case studies today will specifically focus on several of these areas.

Also, in our inspections, we have noted that the following situations tend to increase the likelihood that findings will be identified:

- a significant increase in a firm's issuer audit practice and/or expansion into new industries;

- a recently executed firm merger or acquisition; and

- a significant increase in the number of issuers audited per partner.

Our inspections staff devote considerable attention and time during the inspection process to encourage firms to evaluate possible root causes for deficiencies within the firm's structure, operations, processes or other areas that detract from audit quality.

Today we will discuss the inspection procedures relating to firms' remediation plans and actions.

In general, firms have taken appropriate steps to remediate identified quality control findings. Remediation remains an area of strong focus of the Board and staff.

* * *

Clearly, audit quality requires constant attention and work.

Auditing is difficult and filled with competing tensions, and we can and should continue to learn from years of experience.

P a g e | 52



I hope that you find todays program useful and that you will actively participate in today's discussions and take this information back to your firms.

We also welcome your input and feedback throughout the program.

P a g e | 53



NUMBER 5

Auditing the Future

DATE June 7, 2012

SPEAKER(S): Jay D. Hanson, Board Member

EVENT: Fair Value Measurements and Reporting Conference

LOCATION: National Harbor, MD

Good Morning,

I am very honored to be here this morning to address the Fair Value Measurements and Reporting Conference.

I was a presenter at the first AICPA Fair Value conference in 2009 when I was a partner at McGladrey & Pullen LLP.

Since then, I have moved on to my new role as a Board member of the Public Company Accounting Oversight Board, where I am dealing with many of the same issues I encountered during my years as a public accountant, but from a different perspective.

I am encouraged that you have all joined this event to explore issues related to fair value measurements.

I am going to discuss today some of the Board's activities that may be of consequence to your work and will share with you some of my views from my new perspective as an audit regulator and standard setter.

Before I go further, however, I must tell you that the views I express today are my personal views and do not necessarily reflect the views of the Board, any other Board member, or the staff of the PCAOB.

P a g e | 54



Introduction – Creation of the PCAOB and its Activities

Historically, basic accounting concepts have not changed often or quickly.

The past decade, however, has been a period of unprecedented changes in the areas of accounting and auditing.

The collapse of Enron, the bankruptcy of WorldCom and the subsequent passage of the Sarbanes-Oxley Act of 2002, as well as the increasing use of fair value measurements and the financial crisis, all contributed to an environment that drove these changes.

"SOX," as so many affectionately call the landmark legislation, was the result of investor losses from financial reporting and auditing deficiencies early in this century at some of the largest public companies in the United States: Enron, Global Crossing, Adelphia, Tyco, Qwest Communications, Xerox and WorldCom.

The events involving these companies shook the confidence in the integrity and reliability of public company financial reporting and demonstrated a need for enhancements in internal controls over financial reporting and corporate governance.

Ten years ago next month, Congress passed the Sarbanes-Oxley Act almost unanimously, resulting in the most significant legislation relating to the federal securities laws since 1934.

The Sarbanes-Oxley Act created the PCAOB, which commenced operations in 2003.

The Board's mission – as set forth in the Act – is "to protect the interests of investors and further the public interest in the preparation of informative, accurate and independent audit reports."

As you may know, the PCAOB has four main responsibilities under the Act:

1. Registration of public accounting firms that audit public companies or broker-dealers;

2. Standard Setting;

P a g e | 55



3. Inspections of registered public accounting firms; and

4. Investigations and disciplinary proceedings in cases where auditors may have violated certain provisions of the securities laws or applicable standards or rules.

Currently, over 2400 firms, including over 900 foreign firms from 88 jurisdictions, are registered with the PCAOB.

The PCAOB has built an inspection program comprising over 440 inspection staff members.

Of all registered firms, 9 currently are subject to annual inspection because they issue over 100 audit reports each year, while approximately 850 are subject to inspection at least every three years because they issue 100 or fewer audit reports each year.

Our Office of the Chief Auditor is responsible for leading the Board's standard setting activities.

When it commenced operations, the Board adopted as its interim auditing standards those standards promulgated by the AICPA's Auditing Standards Board before April 16, 2003.

Since then, the Board has issued 15 of its own auditing standards — including, for example, on audit documentation, internal controls, audit planning, engagement quality review, and risk assessment — and has substantially amended a number of interim standards.

More recently, the Board issued concept releases or proposals to trigger wide-ranging discussions about potential changes to certain fundamental aspects of auditing, including the contents of the auditor's report, transparency relating to participants in the audit, audit committee communications, and auditor independence, objectivity, and skepticism.

Since it began operations, the PCAOB has conducted over 1800 inspections, including inspections in 38 jurisdictions outside the United States.

Our enforcement program has sanctioned 39 firms and 52 individuals to date, including imposing censures, temporary and permanent practice

P a g e | 56



bars, revocations of firm registrations, and civil money penalties up to $2 Million.

In pursuing its mission during the last nine years, the Board has evolved from a start-up institution focused on establishing a comprehensive, consistent oversight system to a maturing regulatory organization with the experience and resources to adapt to changing times and new challenges.

Changes in the Accounting and Auditing Professions and the Increase in Fair Value Measurements

The accounting and auditing professions as a whole are facing difficult questions as a result of the increasing complexity of business transactions and cutting edge financial instruments which are appearing more frequently not only in the financial statements of financial institutions but many other types of companies as well.

Thirty years ago, financial statements were dominated by tangible assets and historical cost accounting.

Today, after rapid advances in technology and the development of innovative business models, the balance sheets of an increasing number of companies are dominated by valuation estimates, rather than "solid numbers," and it is much more difficult for accountants, auditors and investors to understand the transactions and products that must be captured in financial statements.

Management and their accountants increasingly must tackle fair value measurements and management estimates, consistent with new accounting standards in connection with derivatives, securitizations, consolidations, debt/equity issues, revenue recognition, leases and other issues.

As a result, the valuation process used by management, and the auditor's review thereof, have had to evolve during the last several decades.

What may have begun as a calculation on a scrap piece of paper – perhaps a simple multiple of EBITDA – evolved into management memos documenting valuation processes; auditors becoming aware of potential pitfalls and increasing their review of management's valuations and

P a g e | 57



estimates; and management ultimately relying increasingly on outside valuation specialists, requiring auditors to gain a better understanding of the assumptions and methodologies employed by these specialists.

And while the sophistication of preparers and auditors dealing with fair value measurements has increased, the recent financial crisis also brought unprecedented attention on the difficulties associated with the valuation of certain types of assets, subjecting the work of accountants to increased scrutiny by regulators and investors.

PCAOB Inspection Findings

So where does the PCAOB come in?

In order to maximize our effectiveness and most efficiently utilize our resources, the Board conducts risk-based inspections.

This means that our inspectors choose to review those audit engagements that they believe, based on extensive research, present the highest level of audit risk.

Within each audit engagement selected, inspectors choose the most challenging and high risk audit areas to review, in order to test the firm's ability to address those challenges and risks.

With this approach, it will not come as a surprise that we look extensively at the auditing of fair value measurements and other management estimates.

Common inspection findings reported by the Board included instances where auditors appear not to have complied with PCAOB auditing standards in certain audit areas, including, among others, fair value measurements of financial instruments, impairment of goodwill, indefinite-lived intangible assets, and other long-lived assets.

Financial Instruments

Often fair values of financial instruments are determined using various modeling techniques.

Hard-to-value financial instruments include among others, private debt securities, auction-rate securities, asset-backed securities, collateralized

P a g e | 58



debt obligations, collateralized mortgage obligations, and other mortgage-backed securities.

Both issuers and auditors frequently obtain pricing information for these financial instruments from outside pricing services, which often use modeling techniques due to limited trading information.

These models often use assumptions such as prepayment speeds, discount rates, and default rates.

PCAOB inspectors have identified instances where the auditor failed to determine whether these prepayment speeds, discount rates, and default rates were supportable and reasonable.

In other situations, auditors did not appropriately consider the weight of both positive and contradictory evidence.

For example, auditors in some cases did not evaluate the implications of significant differences in fair value measurements from different pricing sources for the same financial instruments and relied on the price closest to the issuer's recorded price without evaluating the significance of the difference with the other pricing sources.

In these situations, auditors did not evaluate how the prices were determined and did not determine whether the assumptions used by one pricing service were more reflective of the market than assumptions that were used by the issuer's pricing service.

We have also seen instances where auditors have neglected to appropriately respond to valuation risk.

In those cases, auditors focused their testing of the fair value of financial instruments on easier-to-value securities and excluded or included only cursory testing of hard-to-value securities.

Finally, we have seen several instances where auditors have not performed sufficient procedures to assess the adequacy of the financial statement disclosures for hard-to-value financial instruments.

For example, there have been instances where auditors did not determine whether the assumptions used to calculate the fair values, such as prepayment speeds and default rates were observable or unobservable.

P a g e | 59



Whether or not the assumptions are observable dictates whether a financial instrument would be classified as a level 2 or level 3 fair value measurement.

Non-Financial measurements

PCAOB inspection findings related to valuations and fair value issues in general are not limited to financial instruments, however.

Inspectors have also found deficiencies in connection with the valuations inherent in recording a business combination and performing a goodwill impairment test.

For example, inspectors have identified deficiencies that included auditors' failures to evaluate, or evaluate sufficiently, the reasonableness of significant assumptions used by issuers to estimate the fair value of reporting units in their goodwill impairment assessments or in measuring fair value for other intangible assets and other long-lived assets acquired in business combinations.

Inspectors identified instances in which auditors did not test, or tested only through inquiry of management, issuers' significant assumptions, such as forecasted revenue growth rates, operating margins, discount rates, implied control premiums, and weighted average cost of capital measures.

In some of these instances, inspectors observed that auditors did not evaluate the effect of contradictory evidence when concluding on the reasonableness of certain significant assumptions.

For example, inspectors identified some instances in which auditors accepted, without a sufficient basis, issuers' assumptions that revenue or operating profit would increase in the near future despite recent declines in revenue or historical operating losses.

Inspectors also found instances in which auditors did not evaluate, or evaluate sufficiently, the reasonableness of significant assumptions used by issuers in measuring fair value for other intangible assets and other long-lived assets acquired in business combinations.

P a g e | 60



Specifically, some auditors failed to test, or tested only through inquiry of management, issuers' significant assumptions, such as future revenue growth rates, customer attrition levels, and estimated useful lives.

Finally, firms sometimes neglected to challenge issuers' conclusions that goodwill did not need to be tested for impairment more frequently than annually despite the existence of impairment indicators, such as recent declines in issuers' stock prices or reduced estimates of future revenue in situations where such declines or reductions appeared to be potentially significant to issuers' most recent impairment analyses.

What Auditors and others can do

So what can preparers, valuation specialists and auditors do to avoid audit failures that can lead to the erosion of investor confidence?

Although specific auditing standards apply to each of these areas – I will discuss some of these standards in more detail later during this session – broadly speaking, management, working with their valuation specialists, should take full ownership of all valuation related assumptions and should gather robust support and documentation for the valuations reflected in their financial statements.

Auditors are required to understand and evaluate management's assumptions and processes in establishing valuations or estimates, and to test management's valuations and disclosures.

The auditor also must evaluate any contradictory information that comes to light, and do so objectively and skeptically.

Because auditing management valuations of financial instruments is such a challenging area, the PCAOB convened a Pricing Sources Task Force last year to assist the Board's Office of the Chief Auditor to gain insight into issues related to auditing the fair value of financial instruments.

This group of investors, financial statement preparers, auditors and representatives of pricing services and brokers met three times in 2011 to discuss the valuation of financial instruments that are not actively traded and the use of third-party pricing sources to value such instruments.

P a g e | 61



Also, in November 2011, the Securities and Exchange Commission hosted its first Financial Reporting Series Roundtable on the topic, "Measurement Uncertainty in Financial Reporting."

PCAOB Chairman Doty and I participated in this event, as did Marc Siegel from the Financial Accounting Standards Board.

We heard from investors, preparers, academics and auditors.

It was clear from the discussion that investors' goals for transparency, objectivity and consistency in financial reporting are shared by all.

One of the more significant discussions, in my view, was one that addressed the challenges of reporting historical facts clearly, but in a way that differentiates those facts from information based on predictions of the future and analysis of the company.

Speaking from personal experience, I believe that auditors' skills lie primarily in auditing the past, and not so much in predicting the future!

The Board will consider information provided at these events, along with our experiences in conducting inspections, in determining whether any additional guidance or standard setting activity is warranted in this area.

In the meantime, I would encourage the financial statement preparers among you to think about what you can do to "get behind the numbers" in connection with your disclosures related to fair value measurements and management estimates.

This will allow you to provide to your auditors sufficient information to comply with important auditing requirements.

In that context, I commend to you a speech given by SEC Professional Accounting Fellow Jason Plourde in December of last year at the AICPA National Conference on Current SEC and PCAOB Developments.

Mr. Plourde discussed management responsibilities in connection with the use of pricing service data in informing fair value measurements and disclosure.

Among other things, he proposed a series of questions for management to ask itself when it uses third party pricing services:

P a g e | 62



- Do we have sufficient information about the values provided by pricing services to know that we're complying with GAAP?

- Have we adequately considered the judgments that have been made by third parties in order to be comfortable with our responsibility for the reasonableness of such judgments?

- Do we have a sufficient understanding of the sources of information and the processes used to develop it to identify risks to reliable financial reporting?

- Have we identified, documented, and tested controls to adequately address the risks to reliable financial reporting?

I also encourage preparers to spend some time with your auditors to understand what our standards require.

First, you may want to read your firm's PCAOB inspection reports to understand where engagement teams have fallen short in auditing fair value measurements and other estimates.

This also would be a good place to direct your audit committee.

Discuss with your engagement team what information they will need from you. Educate yourself about your internal valuation processes and assumptions, and think about the ranges and the reasonableness of your choices within those ranges.

Finally, step back, take a look at your disclosures, and consider whether the story presented in your financial statements and disclosures clearly and concisely conveys the uncertainty and potential risks inherent in your measurement estimates.

One of the analyst participants in the Financial Reporting Series roundtable I just discussed remarked, "if we don't understand it, we assume it is bad."

Good disclosure, complemented by thorough auditing, may go a long way toward enhancing investor confidence in the financial reporting process.

P a g e | 63



For those of you who are valuation specialists providing services to financial statement preparers and/or auditors, consider how you can help increase the understanding of preparers and auditors into what you do and how you do it.

Proprietary valuation models aside, think about how you can explain the assumptions you are using, the sources of information on which you rely, and the judgments that are inherent in your valuation results.

All of the important work that you do will mean very little if investors decide that they cannot trust the process by which important valuations are established and audited.

Finally, I would encourage all of you to stay tuned to regulatory developments in this important area.

The PCAOB will issue this summer a series of reports discussing our overall inspection findings in a variety of contexts, including fair value measurements and management estimates.

Our Office of the Chief Auditor also plans to issue later this year some guidance or proposed amendments to the auditing standards related to fair value measurements.

We are always eager for real time input from experts working in the field to inform our standard setting process, so I urge you to review any proposals that are issued and to send us your comments.

P a g e | 64



NUMBER 6

FASB Board Decisions

Summary of Board decisions are provided for the information and convenience of constituents who want to follow the Board’s deliberations.

All of the conclusions reported are tentative and may be changed at future Board meetings.

Decisions are included in an Exposure Draft for formal comment only after a formal written ballot.

Decisions in an Exposure Draft may be (and often are) changed in redeliberations based on information provided to the Board in comment letters, at public roundtable discussions, and through other communication channels.

Decisions become final only after a formal written ballot to issue an Accounting Standards Update.

June 6, 2012 FASB Board Meeting

Impairment of indefinite-lived intangible assets.

The Board discussed comment letters and other feedback received on the Exposure Draft, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, and discussed the staff’s analysis of the Exposure Draft’s proposals in light of that input.

The Board affirmed its proposal to provide entities with the option to use a qualitative approach to assess the impairment of an indefinite-lived intangible asset.

Under that approach, an entity would qualitatively assess whether existing events or circumstances indicate that it is more likely than not that an indefinite-lived intangible asset is impaired (the more – likely – than - not threshold refers to a likelihood that is more than 50 percent).

P a g e | 65



An entity would not be required to perform a quantitative impairment test (comparing the fair value of the asset with its carrying value) if, after assessing the totality of relevant events and circumstances, management determines that it is not more likely than not that the indefinite-lived intangible asset is impaired.

The Board also affirmed that additional disclosure requirements would not be necessary relating to the use of the optional qualitative assessment.

The Board decided that the impairment guidance would be more understandable if it included examples of the types of events and circumstances to be considered in performing the qualitative assessment, rather than a cross reference to the examples in the goodwill impairment test guidance (paragraph 350-20-35-3C(a) through (e)).

The Board also decided not to include the sustained decrease in share price as an example of events and circumstances to be considered in performing the qualitative assessment.

The Board affirmed that a nonpublic entity would not be required to provide quantitative disclosures about significant unobservable inputs used in a Level 3 fair value measurement of an indefinite-lived intangible asset after its initial recognition.

The Board also affirmed that a public entity would continue to be required to provide those disclosures.

The Board affirmed that it acknowledges that the more time that elapses since an entity last calculated the fair value of an indefinite-lived intangible asset, the more difficult it may be to make a conclusion based solely on the qualitative assessment of relevant events and circumstances.

The Board decided to retain such acknowledgement in the basis for conclusions to enhance the consistency of impairment testing guidance between indefinite-lived intangible assets and goodwill.

The Board decided not to include additional implementation guidance in the final Accounting Standards Update.

P a g e | 66



The Board decided to clarify that the more likely than not threshold used in the qualitative impairment assessment would apply for performing an impairment assessment in interim periods.

Current guidance in paragraph 350-30-35-18 states that an interim test must be performed “if events or changes in circumstances indicate that the asset might be impaired.”

This clarification would align the threshold for interim test with the annual impairment test of indefinite-lived intangible assets as well as with the guidance for goodwill impairment.

The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.

The Board decided that the final amendments would be applied prospectively for annual and interim impairment tests performed for fiscal periods beginning after September 15, 2012. Early adoption would be permitted.

Not-for-profit financial reporting: financial statements.

The Board discussed the staff’s proposed project plan, which reflects feedback received from project resource group members.

Board members expressed support for the proposal, directing the staff to proceed as planned.

Definition of a nonpublic entity.

The Board decided that a company that otherwise meets the characteristics of a private company as defined in this project would be deemed a private company for financial reporting purposes if:

1. It is a consolidated subsidiary of an entity that is a public company, or

2. One of its controlled and consolidated subsidiaries is a public company.

The Board also decided that an employee benefit plan would not be deemed a private company for financial reporting purposes.

P a g e | 67



Revenue recognition

The FASB considered a summary of the feedback received from outreach activities with nonpublic entity stakeholders undertaken between September 2011 and May 2012 and nonpublic entity stakeholder comment letters on the revised Exposure Draft, Revenue from Contracts with Customers.

This summary will be posted on the revenue recognition project page on the FASB’s website.

P a g e | 68



NUMBER 7

Call for evidence on Transaction Reporting From The British Bankers’ Association (BBA) to the European Securities and Markets Authority (ESMA) To European Securities and Markets Authority 103, Rue de Grenelle 75007 Paris France

1 June 2012

Dear Sir or Madam

Call for evidence on Transaction Reporting

The British Bankers’ Association (BBA) thanks the European Securities and Markets Authority (ESMA) for the opportunity to comment on its call for evidence on what elements ESMA should consider in its work on guidelines on harmonised transaction reporting together with what areas of the OTC derivatives guidelines need to be updated. The BBA is the leading association for UK banking and financial services sector, speaking for over 230 banking members from 60 countries on the full range of the UK and international banking issues. As such our membership has a broad view of transaction reporting obligations and the requirements as applied by the various competent authorities across Europe, and we recognise that divergent

P a g e | 69



interpretations of reporting requirements will create difficulties for competent authorities when analysing TREM data for potential market abuse. We would like to preface our detailed responses to the specific questions asked by ESMA by providing some general comments.

General Comments

We welcome that ESMA acknowledges the legislative initiatives on MiFID/R and EMIR and that the work on transaction reporting guidelines will be carried out taking into account the progress of the negotiations. We are fully supportive of the intention to harmonise the approach to transaction reporting across Europe. We would respectfully suggest that ESMA adopt the following three guiding principles when proposing revised transaction reporting guidance:

Simplification

Harmonisation

Standardisation

Simplification

The transaction reporting regime supports a complex array of financial instruments and transaction booking methodologies. We are strongly of the opinion that major drivers of data quality are reporting requirements that are simple, clear and unambiguous. Simplification without question reduces the risk of error in interpretation and application of the reporting requirements. The first step must be the introduction of key principles used to assess when and where the execution of a transaction has taken place and by

P a g e | 70



whom and how executions are distinct from the receipt and transmission of orders.

Harmonisation

We firmly believe that data definitions for data fields need to be consistent across jurisdictions and reporting regimes. The time of trade for example is required on both Transaction and Trade reports. To that end a unified approach to trade time reporting is needed. Secondly, consistency between reporting requirements across competent authorities is highly desirable.

Standardisation

We believe, where available, common data standards should be established using where possible existing international data standards.

Questions Q1. What transaction schemes should ESMA consider in its work on harmonised transaction reporting guidelines? Please explain and justify.

We welcome the opportunity to contribute to identifying common transaction reporting schemas which ESMA should consider in its work on guidelines on harmonised transaction reporting. In Annex 1 we have illustrated how the current mandatory fields as stipulated by MiFID allow firms to successfully support the transaction reporting of a wide range of scenarios typically used by BBA members with the reports clearly identifying the client and the reporting Firm facilitating the transaction.

P a g e | 71



We have used the scenarios as identified in the call for evidence and have added several examples used for the reporting of Listed Derivative transactions. We have not shown in the examples each and every transaction report that would be made. For example in some cases the client / counterparty might also have an obligation to report and we have not in all cases shown both investment firms reports.

Q2. What updates and clarifications need to be introduced to the OTC derivatives reporting guidelines?

We agree with ESMA that a consistent interpretation of requirements for data fields common across jurisdictions and reporting regimes is essential. It is therefore necessary that ESMA’s harmonised OTC derivatives transaction reporting guidelines must be consistent with the Technical Standards that are being produced as a result of EMIR. Compatibility between the two will allow firms to report once and once only to a Trade Repository as specified in MiFID2 Any divergence of technical standards may mean that firms develop to a set of standards for Transaction Reporting, a set of standards for Repository reporting and a further set of standards when MiFID 2 allows reporting once to fulfil reporting obligations. It is therefore important for ESMA to update reporting guidelines after a detailed gap analysis between the two reporting requirements under EMIR and MiFID has been conducted. We are mindful of the complexities of merging a repository reporting regime with a transaction reporting regime and respectfully suggest further research and consultation may be required.

P a g e | 72



The MiFID reportable fields should be a subset of fields required by EMIR. However, as it currently stands, there are differences between what is being asked to be reported. For example the data field for “Derivative Type” is required for transaction reporting but is not required under EMIR. Further, EMIR does not consider all potentially reportable events (for example exercise, termination, novation). EMIR references the Dodd Frank Act and MiFID 2 but there is no reference to CESR guidance of 2010.

We have identified examples of where key data fields in the CESR guidance and EMIR either converge or diverge.

Examples of convergence

The following key data fields appear in both the CESR guidance and EMIR technical standards: - Buy / Sell indicators, Unit Price, Price Notation, Quantity, Venue

identification, Underlying identification, Put / Call indicator, Price Multiplier, Expiration date.

These examples show EMIR referencing MiFID in terms of reference data attributes and their descriptions. However, we believe a more detailed analysis may show gaps.

Examples of divergence

The following key data fields do not appear in EMIR technical standards for Trade Repositories. - Derivative Instrument type i.e. Complex K, Instrument description

and open question about strike price.

P a g e | 73



- The CESR guidance identifies transactions that are reportable, however the EMIR technical advice does not reference these transaction types 1

It is evident that the EMIR technical standards do not take into account the CESR guidance. This means that firms have to comply with competing requirements that make the stated aim of reporting once unachievable. It is necessary for ESMA to identify the differences across the CESR guidance, EMIR technical standards and MiFID 2 and then to provide consistency and compatibility of data fields to ensure harmonisation between trade repositories and transaction reporting requirements. It is also apparent from changes to the OTC market, i.e. the increased use of centralised clearing such that bi lateral trades need to be transaction reported for market abuse detection yet the trades are novated to face the clearing house. Further guidance to cater for these circumstances is required. Further we encourage the use of common data standards as follows:

- Standardised reportable events during the lifecycle of a transaction - Standardised Product Classification - Standadised Economic Calculations

We understand that ISDA have completed an ISDA Taxonomy for products that is awaiting final approval from the CFTC at which point a final ratified version will be published. These standards could be considered for the purposes of transaction reporting. There are also inconsistencies over the use of identifiers, for both products and counterparties between authorities.

1 CESR/10-661 How to Report on OTC Derivative instruments; 08/10/2012 page 9

P a g e | 74



Guidance should be sought on which identifier should be used for the product underlying OTC Derivatives, when there is no ISIN available. If there is no identifier available, what it the correct course of action - to not report until an ISIN becomes available? The approach that requires the storing - or 'parking' -of unreported trades until such time as an identifier becomes available leads to significant operational support issues. In this situation, updated guidelines on market data identifiers other than ISINs that can be used should be provided.

Q3. What other aspects of transaction reporting should ESMA consider in its work on harmonised guidelines? Please explain and justify.

Use of the Venue ID field:

There is a divergent approach to requirements for this field. In the UK, this field reflects whether exchange rules are applicable to a trade and this is consistent with Exchange requirements for trade reporting. This means that the field reflects the legal agreements that are in place between the trading parties and this can change dependent on the nature of the trade. For example, share buy back schemes are typically agreed to be under the rules of the exchange of the primary listing Such as the LSE. As such the client side transaction report includes XLON as the venue even when the stock has been sourced from a different venue or through a house fill. We believe however, for simplicity, the venue of where the trade was executed should be included for market side trades and XOFF for all client side transaction reports.

P a g e | 75



Adoption of the Legal Entity Identifier code (LEI):

As you will be aware, the LEI is being developed as an additional identifier which may replace the BIC code and this identifier is planned to be an acceptable identifier under EMIR. We would recommend that the use of the LEI is permitted once available as an alternative identifier and the timing of its introduction is before or aligned with the implementation of EMIR.

Branch reporting:

The interim solution provided by CESR as to what is meant by execution and thus whether a reporting obligation arises has been helpful, however, there is still no one clear view of what constitutes “execution” that clarifies what transactions should be reported and to which competent authority. This means that, currently, firms who have established branches may be required to transaction report to multiple Competent Authorities, determined by the varying interpretations of member states of the terms “execute” and “receipt and transmission of orders”. Further, each competent authority has its own data standards and reporting requirements. This increases not just the cost, but also the complexity of its reporting processes, and increases operational risk. The move towards harmonisation of transaction reporting standards as envisaged by MiFIR and as referred to in this letter should remove the need to transaction report in different formats to various regulators. In addition, it should result in more efficient information exchange between competent authorities, which will hopefully result in a reduction in the requests from multiple competent authorities for further information on the reports that have been made.

P a g e | 76



As an industry we will be discussing this issue in greater detail and welcome the opportunity to discuss potential solutions with ESMA.

Over-reporting of transactions:

In the absence of a single list of reporting instruments, and we would further encourage the existence of such a list firms must continue to be permitted to report transactions in instruments that are not admitted to trading on an EEA regulated market (i.e. non MiFID instruments).

Central Counterparty:

When trading on exchange the obligation is currently to report the central counterparty. Markets are typically anonymous and therefore the actual counterparty is unknown. Firms should have the option of reporting their preferred CCP under interoperability arrangements. This is on the basis that the back office systems need to capture the details of the CCP against which the firm must settle. We continue to favour the use of Counterparty 1 to identify the counterparty as CCP and the Venue field to identify the venue of execution.

Principal crosses:

Within the UK reporting regime Principal crosses are regularly utilised. These allow firms to report both a buy and sell to separate counterparties in the same transaction report where they are executed at the same time and price. Such transactions greatly reduce the volume of transaction reports made and therefore reduces the burden placed on firms in that they have fewer transaction reports to manage.

P a g e | 77



Notwithstanding this, the vast majority of investment firms within the UK utilise the principal cross in several systems. As such should principal crosses not be available going forward this would have very significant cost implications for UK investment firms.

Testing:

We regard to how data is made available by authorities for the purpose of firms' front to back testing of their transaction reporting, we would request ESMA to ensure that this information be provided through an automated service, such as FTP (File Transfer Protocol). At present data is collated in large files, which are then sent by email. Automation would allow for firms' being able to access every day of a months' data, rather than requesting data for specific dates. Given automated systems such as FTP are becoming more of a global standard for institutions to run assurance testing programmes on their transaction reporting, we believe this should be considered as part of a EU standardisation / harmonisation drive. We appreciate the opportunity to address and comment on the issues raised by this call for evidence. We look forward to continuing an open dialogue with you on these important issues to achieve harmonised transaction reporting and would welcome a meeting in person to discuss in more detail. Please do not hesitate to contact Sally Springer (+44 20 7216 8841) should any questions arise. Yours faithfully

Sally Springer Senior Policy Director

P a g e | 78



1. Investment Firm vs. Investor (Principal) Single Venue

Client A Investment FirmLondon Stock

Exchange

Sell Buy

Transaction Reports

Data Field Name Content of Report

Reporting Firm Investment Firm

Trading Capacity P

Buy/Sell Indicator S

Quantity 1

Counterparty 1 Client A

Counterparty 2 Blank

Venue of execution XOFF



Trading Capacity P

Buy/Sell Indicator B

Quantity 1

Counterparty 1 Clearing House


Venue of execution XLON

The Buy/Sell Indicator is from the perspective of the Investment Firm

Client Side Report Market Side Report

2. Investment Firm vs. Investment Firm (Principal)

Investment Firm B Investment Firm ALondon Stock

Exchange

Sell Buy

Transaction Reports


Reporting Firm Investment Firm A

Trading Capacity P


Quantity 1

Counterparty 1 Investment Firm B





Trading Capacity P


Quantity 1





Counterparty Report Market Side Report

P a g e | 79



3a. Investment Firm vs. Investment Firm (Agent)


Exchange

Buy

Transaction Reports



Trading Capacity A


Quantity 1

Counterparty 1 Internal





Trading Capacity A


Quantity 1


Counterparty 2 Internal


Counterparty Side Report Market Side Report

The Buy/Sell Indicator is from the perspective of the Investment Firm B

3b. Investment Firm vs. Investment Firm (Agent)


Exchange

Transaction Reports



Trading Capacity A


Quantity 1




The Buy/Sell Indicator is from the perspective of the Investment Firm B

Buy

P a g e | 80



4. Investment Firm matches 2 client orders

Client A Investment Firm Client BSell Buy

Transaction Reports



Trading Capacity P


Quantity 1






Trading Capacity P


Quantity 1

Counterparty 1 Client B




Client Side Report Client Side Report

6. Systematic Internalisers – MiFID Security only

Client A Investment FirmSell

Transaction Reports



Trading Capacity P


Quantity 1



Venue of execution Systematic

Internaliser BIC


Client Side Report

P a g e | 81



7. On exchange execution of a client order

Client A Investment FirmLondon Stock

Exchange

Sell Buy

Transaction Reports




Trading Capacity P


Quantity 1






Trading Capacity P


Quantity 1





8. Firm executing a transaction vs. EEA Investment Firm


Exchange

Sell Buy

Transaction Reports



Trading Capacity P


Quantity 1






Trading Capacity P


Quantity 1





Counterparty Report Market Side Report

P a g e | 82



9. Two investment firms executing a proprietary transaction

Investment Firm ALondon Stock

ExchangeInvestment Firm B

Sell Sell

Transaction Reports



Trading Capacity P


Quantity 1





Reporting Firm Investment Firm B

Trading Capacity P


Quantity 1




Market Side ReportMarket Side Report


10. Client Order through a chain of Investment Firms

Client A Investment Firm BrokerSell Buy

Transaction Reports



Trading Capacity Principal


Quantity 1

Counterparty 1 Broker



The Buy/Sell Indicator is from the perspective of the Investment Firm or Executing Broker as appropriate

Euronext Paris


Reporting Firm Broker

Trading Capacity Principal Cross


Quantity 1


Counterparty 2 Investment Firm

Venue of execution XPAR

BuySell





Quantity 1




Investment Firm Market side Report Broker Market Side ReportClient Side Report

P a g e | 83



11. Execution of client order through a UK branch

Client AUK Branch of

Investment Firm

London Stock

Exchange

Sell Buy

Transaction Reports


Reporting Firm UK Branch

Investment Firm

Trading Capacity P


Quantity 1





Reporting Firm UK Branch

Investment Firm

Trading Capacity P


Quantity 1






12. Investment Firm vs. Investor (Principal) Multiple Venues

Client A Investment Firm

CHI-X

Sell

Buy

Transaction Reports



Trading Capacity P


Quantity 2






Trading Capacity P


Quantity 1



Venue of execution CHIX

BATS EuropeBuy



Trading Capacity P


Quantity 1



Venue of execution BATE


Client Side Report Market Side Reports

P a g e | 84



13. Grouping of orders

London Stock

ExchangeInvestment Firm

Client A

Buy

Sell

Transaction Reports



Trading Capacity P


Quantity 1






Trading Capacity P


Quantity 1

Counterparty 1 Client B



Client BSell



Trading Capacity P


Quantity 2





Client Side Reports Market Side Report

14. Direct Electronic Access

London Stock

ExchangeInvestment FirmClient A

Buy

Order via DEA provided by Investment Firm

Transaction Reports


Sell



Trading Capacity P


Quantity 1






Trading Capacity P


Quantity 1





P a g e | 85



15. Give up to hedge

London Stock

ExchangeInvestment FirmClient A

BuySell

Transaction Reports


Reporting Firm Swap Broker

Trading Capacity P


Quantity 1



Venue of execution XXXX

Swap BrokerSell



Trading Capacity P


Quantity 1




The Buy/Sell Indicator is from the perspective of the Investment Firm or Swap Broker as appropriate

Swap Broker Report Investment Firm Report

Client A enters into a derivative contract with Swap Broker, Investment Firm executes the underlying security transaction.

Client A’s investment decision is to enter the derivative contract.

16. Smart Order Routing

Client A Investment Firm

CHI-X

Sell

Buy

Transaction Reports



Trading Capacity P


Quantity 2






Trading Capacity P


Quantity 1



Venue of execution CHIX

BATS EuropeBuy



Trading Capacity P


Quantity 1



Venue of execution BATE


Client Side Report Market Side Reports

Smart Order Routing to identify best price

P a g e | 86



17. ETD Client Trade (Aii/ISIN)

Client A Investment Firm EuronextSell Buy

Transaction Reports





Quantity 1

Counterparty 1 LCH Clearnet SA


Venue of execution XEUE


LCH Clearnet

18. ETD Client Trade – Order passed for execution

Client A Investment Firm Executing Broker

External Client A buys 1 contract on a principal basis. Investment firm passes the order to an executing

broker for execution. No client details are passed to the Executing Broker

Sell Buy

Transaction Reports





Quantity 1

Counterparty 1 Executing Firm



The Buy/Sell Indicator is from the perspective of the Investment Firm or Executing Broker as appropriate

CCP

Euronext


Reporting Firm Executing Broker



Quantity 1


Counterparty 2 Investment Firm


P a g e | 87



19. ETD Client Trade – Order passed for execution

Client A Investment Firm Executing Broker

External Client A buys 1 contract on a principal basis. Investment firm passes the order to an executing

broker for execution. Client details are passed to the Executing Broker

Sell Buy

Transaction Reports

The Buy/Sell Indicator is from the perspective of the Executing Broker

CCP

Euronext


Reporting Firm Executing Broker



Quantity 1




As the client details have been passed to the Executing Broker then

the Investment Firm has no reporting obligation

20. ETD House Trade (Aii/ISIN)

Investment Firm Euronext

Investment Firm A buys 1 contract on a principal basis

Buy

Transaction Reports





Quantity 1





LCH Clearnet

P a g e | 88



NUMBER 8

The Next Phase in Islamic Finance

Ravi Menon Managing Director, Monetary Authority of Singapore

Opening Address at the 3rd Annual World Islamic Banking Conference: Asia Summit, Grant Hyatt Singapore, 5 June 2012

Dr Ahmad Mohamed Ali Al-Madani, President, Islamic Development Bank, Your Excellencies, distinguished guests, ladies and gentlemen, good morning.

And to all our foreign guests, a warm welcome to Singapore.

An Increasingly Difficult Conjuncture

We are meeting here for the 3rd Annual World Islamic Banking Conference Asia Summit, at a time of increasing stress in the global economy and financial system.

The effects of monetary stimulus, which had helped to support the economy and prevent a full-blown financial crisis, are now levelling off in both the Eurozone and the US.

The labour market remains a significant drag on growth in the advanced economies.

Unemployment has hit new highs in the Eurozone while employment and production numbers in the US are showing signs of weakness.

P a g e | 89



The story of a two-speed global economy is coming under strain, with demand weakening across emerging Asia.

The moderation in China’s economic growth appears to be somewhat sharper than expected.

India is undergoing an even more pronounced and broad-based slowdown.

But the key risk that has increased in recent months and poses the biggest threat to global economic prospects is the situation in Europe.

- Greece is preparing for a historic election that may well decide its future in the Eurozone.

- Spain is experiencing severe strains in its banking system against a backdrop of a sharp reduction in GDP, high unemployment, and a deteriorating real estate sector.

- Italy and Spain are facing higher sovereign borrowing costs that threaten fiscal sustainability.

To be fair, Eurozone governments have been taking extraordinary measures to help stabilise the situation, reduce fiscal deficits, and restore growth.

But they have reached a turning point where bolder, decisive actions will be needed to reverse the tide.

The next few weeks and months will be critical.

Islamic Finance: Challenges to Overcome

Let me turn now to the subject of our conference.

Islamic finance has shown remarkable resilience during the last five years – perhaps the most challenging economic environment in the post-war era.

The industry has grown by an estimated 20% annually in the last five years to reach US$1.3 trillion in total assets in 2011.

Islamic banks have grown both in number and in scope.

P a g e | 90



But the sustained growth of Islamic finance is in no way guaranteed.

For Islamic finance to continue thriving, the industry has to overcome a few key challenges.

But in every challenge, there is also opportunity. Let me highlight three of them this morning.

Islamic Finance in the Era of Deleveraging

The clear and present danger to all financial activity, including Islamic finance, is the risk of contagion from an escalation of the Eurozone crisis.

Islamic finance is closely intertwined with underlying economic activity and will be affected by the impact of slower global growth.

Contagion from the Eurozone has already curtailed economic growth and capital inflows to many emerging economies where Islamic finance has taken root.

Potential spillovers from an escalation of the Eurozone crisis could lower output in the Middle East and North Africa region by about 3¼ percent relative to baseline, the largest spillover effect for any region outside Europe.

But Islamic finance has a window of opportunity in the current climate of deleveraging in the global financial system.

With its strict prohibition on excessive leverage, Islamic finance has been spared the worst of the financial crisis.

Islamic banks are well positioned to reach out to new customers who are in need of financing as many global institutions pull back on their lending due to the need to repair their balance sheets.

Islamic finance should diversify into growth areas such as trade and infrastructure financing, where demand is still strong, especially in emerging economies.

With a focus on supporting real productive activities, Islamic finance is naturally compatible with trade and infrastructure development.

P a g e | 91



Tapping these sectors also brings about greater diversification benefits, especially for Islamic institutions which have been hurt by their significant lending exposure to the real estate sector.

Islamic Finance and Global Regulatory Reforms

A second factor that Islamic finance will have to contend with is the ongoing global regulatory reforms.

The scale and scope of these reforms are probably unmatched in recent history.

Islamic financial institutions will have to devote considerable resources to meet the new international standards.

But there are certain inherent characteristics of Islamic finance that will stand it in good stead in the emerging regulatory environment.

Take for example, banking, where the emphasis of regulatory reform is on more capital and more liquidity.

Islamic banks have consistently held higher levels of capitalisation vis-à-vis conventional banks, by some 2.5 percentage points on aggregate, according to research from the World Bank.

Islamic banks also start off with a higher level of liquid assets compared to their conventional counterparts.

Islamic finance is also well placed to meet the increased “return-to-basics” investor demand.

Following the global financial crisis, investors have become more averse to the unknown risks embedded in complex financial instruments.

Islamic finance, with its stronger emphasis on transparency, price certainty and risk-sharing, can benefit from this renewed demand for more basic investments, from Muslim and non-Muslim investors alike.

Integrating Islamic Finance with Global Finance

The third, and perhaps most important, challenge that Islamic finance must overcome is its present fragmented state.

P a g e | 92



Islamic finance currently suffers from low economies of scale.

The overall size of Islamic assets is still less than 1% of the global financial system.

Being smaller and relatively young, Islamic finance currently offers fewer product choices for consumers and less comprehensive risk management options for institutions.

Cross-border investment flows are also constrained by differing interpretations of permissible transactions under Shariah principles.

The isolated pools of Islamic liquidity in each market restrict opportunities for more efficient allocation of capital across consumers, industries, and jurisdictions.

Islamic finance must become more integrated with the global financial system.

The industry must expand beyond its traditional markets to include a wider range of financial institutions, investors and consumers.

This means Islamic finance must strike roots in the key international financial centres of the world.

These centres can contribute to Islamic finance in several ways.

First, market liquidity.

The broad and deep investor pools in international financial centres offer an opportunity to channel non-traditional sources of funds into Islamic finance.

In Singapore, for instance, several local and foreign issuers have successfully tapped the capital markets using Islamic instruments.

The demand comes from not just Singapore but a diverse group of international investors across Asia and Europe.

Many of them are conventional investors, attracted by the credit quality and yields.

Second, capabilities in global financial markets.

P a g e | 93



Islamic finance should leverage on the capabilities and strengths offered by conventional financial markets in international centres, to augment the range of Shariah-compliant products.

Take for example the market for Real Estate Investment Trusts, or REITs. Singapore has grown over the past decade to become the largest REIT market in Asia outside of Japan.

Building on this strength, players in Singapore have established the world’s largest Shariah-compliant REIT, which draws in conventional and Islamic investors around the world.

Third, opportunities for interaction and collaboration.

As Islamic finance gains prominence, conventional financial institutions increasingly want to be involved to tap these opportunities.

Financial centres like Singapore serve as intersecting nodes where Islamic financial institutions collaborate with their conventional partners to jointly grow the industry.

By applying the same regulatory framework to both conventional and Islamic financial institutions, Singapore aims to encourage financial institutions here to grow their suite of products and services for the Islamic finance industry.

Conclusion

Let me conclude. Islamic finance has come a long way.

As it embarks on its next phase of growth, the industry must overcome the challenges posed by slower growth and global deleveraging, and build scale and reach critical mass.

This requires financial institutions, regulators, and international standard setting agencies to work closely together. Forums like these are ideal platforms. I wish you fruitful discussions. Thank you.

P a g e | 94



NUMBER 9 Governor Daniel K. Tarullo

Dodd-Frank Act Implementation Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C. June 6, 2012

Chairman Johnson, Ranking Member Shelby, and other members of the committee, thank you for the opportunity to testify on the Federal Reserve's implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).

As we approach the second anniversary of the Dodd-Frank Act, implementation of the financial reforms enacted by the Congress remains a formidable task.

At the Federal Reserve, staff teams with a wide range of expertise continue to contribute to Dodd-Frank Act projects, many as part of joint rule-making efforts with other federal agencies.

We have been working to put final Dodd-Frank Act rules in place and to negotiate and implement international reforms compatible with various Dodd-Frank Act provisions; these include enhanced capital requirements for systemically important banks, liquidity requirements, resolution mechanisms, and margining requirements for over-the-counter derivatives.

As we continue rule implementation and the related international initiatives, we are trying to provide as much clarity as possible to financial markets and the public about the post-crisis financial regulatory landscape, and are also taking the time to consider comments and alternatives carefully.

In addition, the Federal Reserve continues to work cooperatively with other supervisors to ensure that prudential supervision is conducted in a manner that supports these important reforms.

As a final introductory point, it bears noting that both the Dodd-Frank Act reforms and the international regulatory reforms share an important

P a g e | 95



feature--a strong focus on the largest, most complex, and most interconnected financial firms and the systemic risks posed by those firms.

This effort reflects the provenance of both the Dodd-Frank Act and international reform initiatives, which were motivated largely by the failure or near failure of a number of major financial firms and the significant public policy problems created by the market perception that such firms are "too big to fail."

As the Federal Reserve implements reforms, we have maintained this core focus on the largest firms by proposing rules that try to mitigate the systemic risks posed by those firms and minimize the burden on smaller entities, particularly community banks.

Similarly, we seek to implement reforms in a manner that is faithful to statutory requirements and that maximizes financial stability and other economic benefits at the least cost to credit availability and economic growth.

This morning I will briefly describe the Federal Reserve's progress on several important Dodd-Frank Act rules and recent reforms to the international bank regulatory framework.

I will also describe briefly the Federal Reserve's role in supervising and examining the largest financial firms in cooperation with other federal and state supervisors.

Enhanced Capital Standards

While robust bank capital requirements alone cannot ensure the safety and soundness of our financial system, they are central to good financial regulation precisely because capital is available to absorb all kinds of potential losses--unanticipated as well as anticipated.

Indeed, the best way to safeguard against taxpayer-funded bailouts in the future is for our large financial institutions to have capital buffers commensurate with their own risk profiles and the damage that would be done to the financial system if such institutions were to fail.

P a g e | 96



Recent events serve to remind us that the presence of substantial amounts of high-quality capital is the best way to ensure that significant losses at individual firms are borne by their shareholders, and not by depositors or taxpayers.

Ensuring the capital adequacy of financial firms requires both improvement of the traditional, firm-based approach to capital regulation and the creation of a more systemic, or macroprudential, component of capital regulation.

With respect to improving the traditional approach to capital regulation, the Federal Reserve's work has principally involved the development of stronger regulatory capital standards in cooperation with other supervisors in the Basel Committee on Banking Supervision.

This work includes the so-called Basel 2.5 reforms that strengthened the market-risk capital requirements of Basel II.

This work also includes the Basel III reforms, which improve the quality of regulatory capital, increase the quantity of required minimum regulatory capital, require banks to maintain a capital conservation buffer and, for the first time internationally, introduce a minimum leverage ratio.

The Federal Reserve and other U.S. banking agencies are moving to finalize regulations to implement Basel 2.5 in the United States and soon will be proposing regulations to implement Basel III.

These significant changes to the international regulatory capital framework have been supplemented by an important element of the Dodd-Frank Act known as the "Collins Amendment."

The Collins Amendment provides a safeguard against declines in minimum capital requirements in the Basel II capital regime based on bank internal modeling.

The Federal Reserve and other U.S. banking agencies issued final rules to implement this provision in June 2011.

Capital Surcharges for Systemically Important Financial Firms

The recent financial crisis also made clear that the existing international regulatory capital framework was not sufficiently responsive to

P a g e | 97



macroprudential concerns, such as the threat to financial stability posed by systemically important financial institutions.

Accordingly, in Basel Committee deliberations, the Federal Reserve advocated for capital surcharges on the world's largest, most interconnected banking organizations based on their global systemic importance.

Last year, an international agreement was reached on a framework for such surcharges, to be implemented during the same 2016-2019 transition period for the capital conservation buffers in Basel III.

This initiative is consistent with the Federal Reserve's obligation under section 165 of the Dodd-Frank Act to impose more stringent capital standards on systemically important financial institutions, including the requirement that these additional standards be graduated based on the systemic footprint of the institution.

Both the Dodd-Frank Act provision and the Basel framework are motivated by the fact that the failure of a systemically important firm would have dramatically greater negative consequences on the financial system and the economy than the failure of other firms.

Stricter capital requirements on systemically important firms should also help offset any funding advantage these firms derive from any remaining perceived status as too-big-to-fail and provide an incentive for such firms to reduce their systemic footprint.

The Federal Reserve's aim has been to fashion the enhanced capital requirements of section 165 and work toward an associated international framework in a simultaneous and congruent manner.

Stress Testing and Capital Planning

Recent improvements to the regulatory capital framework have important supervisory complements in the Federal Reserve's development of firm-specific stress testing and capital planning requirements.

These supervisory tools serve two related functions.

P a g e | 98



First, they make capital regulation more forward-looking by testing whether firms would have enough capital to remain viable financial intermediaries if they sustained hypothetical losses in asset values and earnings in an adverse macroeconomic scenario.

Second, they contribute to the macroprudential dimension of supervision by enabling simultaneous examination of the risks faced by all large financial institutions in a hypothetical adverse economic scenario.

The Dodd-Frank Act creates two forms of stress-testing requirements.

These requirements mirror the Supervisory Capital Assessment Program model, a 2009 effort led by the Federal Reserve that helped restore confidence in the viability of the banking system during the financial crisis.

First, the act mandates that the Federal Reserve conduct annual stress tests on all bank holding companies with $50 billion or more in assets to determine whether they have the capital needed to absorb losses in hypothetical baseline, adverse, and severely adverse economic conditions.

Second, the act requires both these companies and certain other regulated financial firms with assets between $10 billion and $50 billion to conduct internal stress tests.

The Federal Reserve must publish a summary of results of the supervisory stress tests and issue regulations requiring firms to publish a summary of the company-run stress tests.

Regular and rigorous stress testing provides regulators with knowledge that can be applied to both microprudential and macroprudential supervision efforts.

Disclosure of the general methodology and firm-specific results of our stress testing has additional regulatory benefits.

First, the release of certain details about assumptions, methods, and conclusions exposes the supervisory approach to greater external scrutiny and discussion.

P a g e | 99



Such discussions will almost surely help us improve our assumptions and methodology over time.

Second, because bank portfolios are difficult to value without a great deal of detailed information, the stress test results should be very useful to investors in and counterparties of the largest banking firms.

Further, I believe the demands of supervisors for well-specified data and projections from firms have improved risk management at these firms.

The stress testing that the Federal Reserve has instituted during the past few years has become an important part of our horizontal, interdisciplinary approach to supervising the largest bank holding companies.

Firm-specific capital planning has also become an important supervisory tool.

In November 2011, the Federal Reserve issued a new regulation requiring large banking organizations to submit an annual capital plan.

This tool serves multiple purposes.

First, it provides a regular, structured, and comparative way to promote and assess the capacity of large bank holding companies to understand and manage their capital positions.

Second, it provides supervisors with an opportunity to evaluate any capital distribution plans against the backdrop of the firm's overall capital position, a matter of considerable importance given the significant distributions that some firms made in 2007 even as the financial crisis gathered momentum.

Third, at least for the next few years, it will provide a regular assessment of whether large bank holding companies will readily meet the Basel 2.5 and Basel III capital requirements as they take effect in the United States.

A stress test is a critical part of the annual capital plan review.

But, as these three different purposes indicate, the capital plan review is about more than using a stress test to determine whether a firm's capital

P a g e | 100



distribution plans are consistent with remaining a viable financial intermediary in adverse economic conditions.

As indicated during our capital plan reviews in both 2011 and 2012, the Federal Reserve may object to a capital plan because of significant deficiencies in a firm's capital planning process, as well as because one or more relevant capital ratios would fall below required levels under the assumptions of stress and planned capital distributions.

Likewise, the stress test is relevant not only for its role in the capital planning process.

As noted earlier, it also serves other important purposes, not least of which is increased transparency of both bank holding company balance sheets and the supervisory process of the Federal Reserve.

Enhanced Liquidity Standards

As with capital, the financial crisis also brought attention to defects in the liquidity risk-management practices of large financial firms.

As seen during the crisis, a financial firm--particularly one with significant amounts of short-term funding--can become illiquid before it becomes insolvent, as creditors run in the face of uncertainty about the firm's viability.

While higher levels and quality of capital can mitigate some of this risk, it was widely agreed that quantitative liquidity requirements should be developed.

The Basel Committee generated two liquidity standards: one, a Liquidity Coverage Ratio (LCR) with a 30-day time horizon; the other, a Net Stable Funding Ratio (NSFR) with a one-year time horizon.

However, insofar as this was the first-ever effort to specify such requirements, the Governors and Heads of Supervision of the countries represented on the Basel Committee determined that implementation of both frameworks should be delayed while they are subject to further examination and possible revision.

As is the case with enhanced capital standards for the largest banking firms, the Basel Committee's liquidity initiatives are consistent with the

P a g e | 101



Federal Reserve's obligation under section 165 of the Dodd-Frank Act to impose more stringent liquidity standards on the largest bank holding companies as well as other systemically important nonbank financial firms.

The LCR has been actively reconsidered within the Basel Committee over the last year or so. As this work proceeds, four types of changes appear particularly ripe for consideration.

First, the LCR's definition of high-quality liquid assets should be broadened.

In this regard, we support efforts to move away from the current credit risk-based approach and toward a quantitative liquidity-based approach.

Second, some of the assumptions embedded in the LCR about run rates of liabilities and the liquidity of assets might be grounded more firmly in actual experience during the crisis, as the LCR may overstate in particular the liquidity risks of commercial banking activities.

Third, additional consideration needs to be given to the liquidity risks inherent in trading activities that rely upon large amounts of short-term wholesale funding.

Fourth, the LCR could be better adapted to ensure usability of the high-quality liquid asset buffer in appropriate circumstances: for example, by making credibly clear that ordinary minimum liquidity levels need not be maintained in the midst of a crisis.

As currently constituted, the LCR may have the unintended effect of exacerbating a period of stress by forcing liquidity hoarding.

The Basel Committee will likely suggest a set of changes to the LCR later this year, with a goal of introducing the LCR in 2015.

Work on the NSFR is on a considerably slower track; the current plan is for implementation in 2018.

Enhanced Prudential Standards for the Largest Financial Firms

Sections 165 and 166 of the Dodd-Frank Act require the Federal Reserve to establish a broad set of enhanced prudential standards, both for bank

P a g e | 102



holding companies with total consolidated assets of $50 billion or more and for nonbank financial companies designated by the Financial Stability Oversight Council (Council).

In addition to enhanced risk-based capital and liquidity requirements and stress testing, the required standards also include single-counterparty credit limits, an early remediation regime, and risk-management and resolution-planning requirements.

Sections 165 and 166 also require that these prudential standards become more stringent as the systemic footprint of a firm increases.

In December, the Federal Reserve issued a package of proposed rules to implement sections 165 and 166 of the Dodd-Frank Act.

The Federal Reserve's proposed rules would apply the same set of enhanced prudential standards to covered companies that are bank holding companies and to covered companies that are nonbank financial companies designated by the Council.

As we made clear in the proposal, however, the Federal Reserve expects to tailor the application of the enhanced standards to different companies individually or by category, taking into consideration each company's capital structure, riskiness, complexity, financial activities, size, and any other risk-related factors that the Federal Reserve deems appropriate.

The comment period for our enhanced prudential standards proposal closed on April 30. Nearly 100 comment letters were received.

The Federal Reserve is currently reviewing those comments carefully as we work to develop final rules.

The Volcker Rule

Section 619 of the Dodd-Frank Act, commonly known as the "Volcker Rule," generally prohibits banking entities from engaging in proprietary trading or acquiring an ownership interest in, sponsoring, or having certain relationships with a hedge fund or private equity fund.

In October, the Federal Reserve joined the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC),

P a g e | 103



and the Securities and Exchange Commission in seeking public comment on a proposal to implement the Volcker Rule.

The Commodities Futures Trading Commission issued its substantially similar proposal for comment shortly thereafter.

Because of the importance and complexity of the issues raised by the statutory provisions that make up the Volcker Rule, the Federal Reserve and other agencies provided the public with a 120-day opportunity to submit comments.

The comment period is now closed, and nearly 19,000 public comments were received.

The agencies are now working together to review and consider these comments and put final implementing rules in place as soon as practicable.

In April, after consultation with the other agencies, the Federal Reserve issued guidance on a Volcker Rule conformance period that was intended to help limit any confusion about when banking entities will need to comply with the final rules once issued.

The Federal Reserve's statement clarified that a banking entity has the full two-year period provided by the statute (i.e., until July 21, 2014), unless that period is extended by the Board, to fully conform its activities and investments to the requirements of the Volcker Rule, including any final implementing rules adopted by the agencies.

Prudential Supervision of Large Financial Firms

In the wake of the Dodd-Frank Act, the prudential supervision of the largest, most complex financial firms remains a cooperative effort.

As before, the law mandates that a variety of federal and state supervisors execute particular supervisory and examination responsibilities for certain parts of a firm.

This allocation of supervisory oversight among different agencies reflects, among other factors, the historical development of various types of financial intermediaries in the United States and a series of legislative decisions about regulatory and supervisory structure.

P a g e | 104



As the regulator and supervisor of bank holding companies, the Federal Reserve's role in this statutory arrangement is typically that of consolidated regulator and supervisor of the parent holding company.

Accordingly, our supervisory program for such firms generally takes a broad view of the activities, risks, and management of the consolidated firm, with a particular focus on the capital adequacy, governance, and risk-management practices and competencies of the firm as a whole.

Many of the principal business activities of the largest financial firms are conducted through the functionally regulated subsidiaries of those firms, such as insured depository institutions, broker-dealers, and insurance companies.

As required by section 5 of the Bank Holding Company Act, the Federal Reserve generally relies to the fullest extent possible on the examination and supervision of those subsidiaries by the functional regulators.

Together, the Federal Reserve and other functional regulators work to discharge the supervisory and examination responsibility given to each agency for particular parts of a large financial firm in a way that maximizes the expertise and resources of each agency and best ensures the safety and soundness of the consolidated firm and each of its constituent parts.

Just as the financial crisis revealed the need for change in the prudential standards applicable to financial firms and activities, so too did it make clear that important changes in supervisory practices were needed to improve both the microprudential and macroprudential oversight of banks and bank holding companies.

To that end, even before passage of the Dodd-Frank Act, the Federal Reserve began to reorient its supervisory structure and strengthen its supervision of the largest, most complex financial firms.

The most important change has been creation of the Large Institution Supervision Coordinating Committee (LISCC).

The LISCC is founded on several principles: that large institution supervision should be more centralized; that it should conduct regular,

P a g e | 105



simultaneous, horizontal (cross-firm) supervisory exercises; and that it should be more interdisciplinary than it has been in the past.

Thus, the LISCC includes senior Federal Reserve staff from research, legal and other divisions at the Board, from the markets and payments systems groups at the Federal Reserve Bank of New York, and senior bank supervisors from the Board and relevant reserve banks.

Relative to previous practices, this approach to supervision relies more on quantitative methods for evaluating the performance and vulnerabilities of firms.

To date, the LISCC has developed and administered various horizontal supervisory exercises, notably the capital stress tests and the related comprehensive capital reviews of the nation's largest bank holding companies, and is now extending its activities to coordinate other supervisory processes more effectively.

It also has focused its attention on potential implications for financial stability in the United States from stresses arising in Europe.

Review of JPMorgan Chase & Co. Trading Loss

In response to the significant trading losses that were recently announced by JPMorgan Chase & Co. (JPMorgan) as a result of trading operations at the London branch of its national bank, the Federal Reserve--in its capacity as consolidated supervisor of the bank holding company--is working with the OCC, the regulator of the national bank, to review the firm's response and remedial actions.

In particular, the Federal Reserve has been assisting in the oversight of JPMorgan's efforts to manage and de-risk the portfolio in question.

As this process proceeds, we anticipate also working with the OCC and FDIC to identify the changes in risk measurement, management and governance that will be necessary to improve risk-control practices surrounding the firm's trading activities and to address trading strategies that led to these losses.

P a g e | 106



In addition, the Federal Reserve has been looking at other parts of the holding company to determine if governance, risk management and control weaknesses--similar to those exposed by this incident--are present elsewhere.

While we have, to date, found no evidence that they are, this review is not yet complete.

Conclusion

The recent financial crisis disrupted the financial system and the broader economy on a scale and scope not seen since the 1930s.

Some of the world's largest financial firms collapsed or required government assistance to stay afloat, sending shock waves through the highly interconnected global financial system.

Asset prices fell sharply, flows of credit to American families and businesses slowed dramatically, and millions of people lost their jobs.

Extraordinary actions by governments around the world helped to provide stability, but more than four years after the onset of the crisis, the recovery is far from complete.

It is critical that we complete the implementation of capital and other prudential measures to prevent another crisis and protect taxpayers from having again to recapitalize financial firms.

Thank you very much for your attention. I would be pleased to answer any questions you may have.

P a g e | 107



NUMBER 10

Mortgage financing: FINMA recognises new minimum standards

Press release

The Swiss Financial Market Supervisory Authority FINMA has approved the new minimum re-quirements for mortgage financing drawn up by the Swiss Bankers Association (SBA) as a minimum regulatory standard.

The new self-regulatory regime, which enters into force from 1 July 2012, for the first time lays down minimum requirements concerning down-payments by borrowers and introduces compulsory amortisation.

The recognition comes in the context of the measures presented today by the Federal Council concerning the implementation of Basel III, “too big to fail” and reduction of the risks in the mortgage market, which FINMA expressly welcomes.

FINMA has for a long time been pointing out the risks that could build up as a result of rapid growth in mortgages for residential property.

There is no sign of a weakening in the strong demand for mortgage financing, not least due to the exceptionally low level of interest rates.

In the course of its supervisory activities and direct inspections, FINMA has also noted that many banks are stretching their own lending criteria to the limit, as regards both financial sustainability for the borrower and the loan-to-value ratio applied to the property, and are also making increased use of exceptions to policy.

This is creating a new segment of borrowers who would not be able to acquire residential property under different market conditions.

P a g e | 108



In particular, there is a risk that rising interest rates would leave such borrowers unable to service their loans, ultimately raising the possibility of defaults and falling property prices.

When a real-estate bubble bursts, the implications for a country’s financial stability can be extremely serious.

Guidelines on minimum down-payments and amortisation

The SBA guidelines set out basic requirements concerning minimum down-payments by borrowers and contain clear rules on amortisation that must be taken into account during financial sustainability analyses.

Given that this is a self-regulatory regime imposed by the banks themselves, FINMA ex-pects it to be widely accepted by them and implemented swiftly and conscientiously.

Minimum down-payments from own funds:

In future, borrowers will be required to supply at least 10 per cent of the lending value of the property from their own funds, which may not be obtained by pledging or early withdrawal of Pillar 2 assets.

This means that the purchase of a property by a mort-gagor using a down-payment derived exclusively from pension fund assets will not meet the minimum standards.

The new guidelines require borrowers to be on a sounder financial footing.

Equally, they reduce the danger that they will put at risk their retirement capital and, with it, their pensions.

Amortisation:

Under the new rules, mortgages must in all cases be paid down to two thirds of the lending value within a maximum of 20 years.

Waiving amortisation in the expectation of rising property prices would not, therefore, meet the minimum standards.

P a g e | 109



The amortisation rules require the debt burden to be steadily reduced, which will have a positive effect on long-term financial sustainability.

Revised Capital Adequacy Ordinance contains reference to the new minimum standards

In the event that a mortgage granted after 1 July breaches these new minimum standards, banks will be required to significantly increase the capital involved to cover it.

This is stipulated in the Federal Council’s revised Capital Adequacy Ordinance, which also contains a further instrument for reducing mortgage risks.

If a bank grants a mortgage amounting to more than 80 per cent of the lending value, it will be required to back it with a higher level of capital.

This measure comes into force on 1 January 2013.

As a further measure, from 1 July 2012 the Federal Council will have at its disposal a new capital buffer for all banks that can be selectively and temporarily activated for specific sectors, such as the mortgage business. Although the amortisation requirement has a direct impact on financial sustainability calculations, there are still no binding minimum standards in this central area of residential property financing.

However, a realistic assessment of the medium-term financial situation is invariably in the interest of borrowers too, as it ensures that their property remains affordable for them even if interest rates rise or their own income falls.

FINMA views the measures as positive steps

The package of measures for the mortgage sector presented by the Federal Council today, and the binding SBA guidelines issued in this context, are steps towards counteracting the increasing risks in the mortgage market.

FINMA welcomes these measures and their rapid implementation.

P a g e | 110



In the medium term, the measures will improve the quality of the banks’ mortgage portfolios or, alternatively, lead to higher capital requirements geared to the risks involved.

However, the guidelines will have no direct effect on existing loan agreements and the risks associated with them.

P a g e | 111



Certified Risk and Compliance Management Professional (CRCMP) Distance learning and online certification program. Companies like IBM, Accenture etc. consider the CRCMP a preferred certificate. You may find more if you search (CRCMP preferred certificate) using any search engine. The all-inclusive cost is $297. What is included in the price:

A. The official presentations we use in our instructor-led classes (3285 slides) The 2309 slides are needed for the exam, as all the questions are based on these slides. The remaining 976 slides are for reference. You can find the course synopsis at: www.risk-compliance-association.com/Certified_Risk_Compliance_Training.htm

B. Up to 3 Online Exams You have to pass one exam. If you fail, you must study the official presentations and try again, but you do not need to spend money. Up to 3 exams are included in the price. To learn more you may visit: www.risk-compliance-association.com/Questions_About_The_Certification_And_The_Exams_1.pdf www.risk-compliance-association.com/CRCMP_Certification_Steps_1.pdf

http://www.risk-compliance-association.com/Certified_Risk_Compliance_Training.htm

http://www.risk-compliance-association.com/Certified_Risk_Compliance_Training.htm

http://www.risk-compliance-association.com/Questions_About_The_Certification_And_The_Exams_1.pdf

http://www.risk-compliance-association.com/Questions_About_The_Certification_And_The_Exams_1.pdf

http://www.risk-compliance-association.com/CRCMP_Certification_Steps_1.pdf

http://www.risk-compliance-association.com/CRCMP_Certification_Steps_1.pdf

P a g e | 112



C. Personalized Certificate printed in full color. Processing, printing, packing and posting to your office or home.

D. The Dodd Frank Act and the new Risk Management Standards (976 slides, included in the 3285 slides) The US Dodd-Frank Wall Street Reform and Consumer Protection Act is the most significant piece of legislation concerning the financial services industry in about 80 years. What does it mean for risk and compliance management professionals? It means new challenges, new jobs, new careers, and new opportunities. The bill establishes new risk management and corporate governance principles, sets up an early warning system to protect the economy from future threats, and brings more transparency and accountability. It also amends important sections of the Sarbanes Oxley Act. For example, it significantly expands whistleblower protections under the Sarbanes Oxley Act and creates additional anti-retaliation requirements. You will find more information at: www.risk-compliance-association.com/Distance_Learning_and_Certification.htm

http://www.risk-compliance-association.com/Distance_Learning_and_Certification.htm

http://www.risk-compliance-association.com/Distance_Learning_and_Certification.htm

P a g e | 113



Visit our Risk and Compliance Management Speakers Bureau The International Association of Risk and Compliance Professionals (IARCP) has established the Speakers Bureau for firms and organizations that want to access the expertise of Certified Risk and Compliance Management Professionals (CRCPMs) and Certified Information Systems Risk and Compliance Professionals (CISRCPs). The IARCP will be the liaison between our certified professionals and these organizations, at no cost. We strongly believe that this can be a great opportunity for both, our certified professionals and the organizers. To learn more: www.risk-compliance-association.com/Risk_Management_Compliance_Speakers_Bureau.html

www.risk-compliance-association.com/Risk_Management_Compliance_Speakers_Bureau.html

www.risk-compliance-association.com/Risk_Management_Compliance_Speakers_Bureau.html

http://www.risk-compliance-association.com/

P a g e | 114



Monday June 11 2012 - Top 10 Risk Compliance News Events (114 pages)

Career

Transcript of Monday June 11 2012 - Top 10 Risk Compliance News Events (114 pages)