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Solutions to assist in navigating Basel IV

The implementation of the Basel IV framework is already a remarkable challenge for the European banking landscape, as methodologies for the determination of capital requirements are to be revised. In doing so, capital calculations across all risk types will be fundamentally redesigned.

PwC has already developed numerous thematic solutions and project management models that can to implement changes from Basel IV requirements. On this page you can see a selection of PwC tools and solutions to assist you with navigating the extensive changes from Basel IV.

New regulations surrounding Basel IV will have a major impact on the calculation of capital requirements in the coming years. In the following, we will give you some examples of the challenges that have been identified by our Basel IV experts.

Key challenges:

• Basel IV will change almost all approaches to RWA calculation, whether using internal models orstandard procedures.

• A general increase in RWA in all risk types and approaches is to be expected. Due to the partial higher risk sensitivity, this will have a direct impact on individual products, portfolios and business areas.

• This has implications for business and risk strategies and requires an early analysis of the impact of new regulations on the business model of banking institutions.

• The complexity of the new standardised approaches increases; Extensive implementation projects are required.

• Due to the implementation of capital floors, all banks with an authorisation to use internal models will be obliged to calculate RWAs in parallel according to standardised approaches.

• The new approaches require extensive data requirements, eg market data granularity and historical data for the use of internal market risk models or detailed data on real estate collateral in the lending business for the new credit risk standardised approach.

• A massive expansion of the reporting requirements to the supervisory authorities is to be expected, e.g. monthly rather than quarterly reporting of market risk.

• A completely new generation of data and reporting software will have an impact on the future IT infrastructure.

Our solutions:

  • PwC has been analysing the possible effects of Basel IV since 2012. We have an extensive knowledge from local and international projects, with a wealth of SME’s in relation to Basel IV.
  • PwC can assist from an early stage by providing calculation tools as well as analysis of the strategic implications of new regulations.
  • An interdisciplinary team of experienced experts from the fields of strategy consulting, supervisory law, risk management and IT support you in coping with the major challenges that Basel IV brings.
  •  PwC can support you in setting up an optimal project organisation.
  • The Global Basel IV initiative allows PwC to incorporate experiences from pre-study, parallel calculations and implementation projects from around the world into your projects.
  • Regardless of whether standardised procedures for credit, market risk or operational risk, PwC, as a leading consultant on regulatory issues, has extensive experience in interpreting and applying new regulatory requirements.

Basel IV at a glance

On Wednesday 23rd November, the European Commission published its first proposals for revised rules to calibrate capital and liquidity requirements – in the form of a Directive and a Regulation (“CRD V”& “CRR II”), as well as amendments to the bank recovery and resolution Directive (“BRRD”), to implement global standards for total loss absorbing capital.

Officially "Basel IV" is about "finalising Basel III" - but according to many bank representatives, the specifications set by the Basel Committee already reach so far that the industry talks about "Basel IV" instead. But what exactly falls under this keyword? Which new rules can be expected by banks in the upcoming months and years?

Latest news from Basel IV: Challenges and Implications - 28th october 2016

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Basel IV webcast

As the Basel committee continues its drive to strengthen the regulation, supervision and practices of banks worldwide, the committee has produced, and continues to produce a number of consultation and discussion papers which point to a significant revision of the Basel Framework. This revision may well be considered “Basel IV”.

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CRR II Webcast

As the Basel committee continues its drive to strengthen the regulation, supervision and practices of banks worldwide, the committee has produced, and continues to produce a number of consultation and discussion papers which point to a significant revision of the Basel Framework. This revision may well be considered “Basel IV”.

While the impact of this new regulatory agenda will be felt by all banks, regardless of size or business model, it will also present banks with the opportunity to reassess, address and embed its risk and governance strategy into its business models and wider strategies. 

PwC considers its task to inform you in a prompt and flexible way about Basel IV. In addition to informing you through newsletters and through our website, we organise periodic seminars and have launched our Basel IV Channel. The Channel is a new medium to give you a periodical overview on current topics around Basel IV. It comprises a series of online lectures supported by slides. Within a time frame of 15 to 30 minutes we deliver you a compact overview of the current issues related to Basel IV.

Previous editions and recordings can be viewed on our dedicated Youtube channel.

Basel IV Calculation tool

Would you like to assess the quantitative impact of the Basel IV framework on your portfolio?

PwC has developed numerous calculation tools to help your bank understand key changes from Basel IV. Do not hesitate and plan your parallel calculations and preliminary studies for your bank at an early stage - this is the only way to efficiently carry out the next strategic steps.
 

Contact Martin Neisen for a further demo of the tool

View our Basel IV Yotube channel

Credit Risk Calculator

Basel IV Channel: Credit Risk Calculator

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Basel IV Toolbox

Since the beginning of the crisis in the financial markets, there have been a growing number of both large- and small-scale projects with which the financial supervisory authorities aim at improving bank stability.

This means that the affected financial institutions have to adapt in various areas at ever-shortening intervals.

So that you can stay on top of the situation, we developed our Regulatory Toolbox – based on a sound specialist foundation, it is easy to understand and always up to date. With the Toolbox, you have all the tools you need regarding supervisory law – right on your desktop!

Just like a well-ordered toolbox, ours is filled with the instruments you’ll need for any up-coming tasks. And as soon as a new consultation paper poses new challenges for you or new rules have been finalised, we deliver the right extension – the right tool – directly to your Toolbox.

We wish you success for your up-coming projects. No matter what the challenge, you will have the gear you need to tackle it with this Regulatory Toolbox. Part one of  the toolbox is available to download below, with further editions to follow. A hard copy, box and future editions can be ordered via your local territory contact.

At PwC we have developed a number of tools to assist our clients in their standardised approach, an overview is provided below. Further details can be found in our tools for The Basel IV standardized approach deck, to compliment this you can watch the full presentations on our Basel IV youtube channel.

Basel IV poster

Our new Basel IV poster offers you an in-depth overview of all regulatory actions of the Basel Committee in relation with Basel IV.

Our "Basel IV" poster shows the legal basis, identifies the relevant Basel papers and illustrates the interconnection's between the individual arrangements. By requesting your copy of the poster you receive a compact overview of all "Basel IV" related regulatory activities.

View our Basel IV Poster

Contact your local PwC Basel IV Territory Leader for a copy

Basel IV book: The reference book for those who need more detail

Our PwC experts from Regulatory Management have written a comprehensive Basel IV book, which provides the first "self-study" on Basel IV innovations by means of prepared examples and further background information on key changes.

Order a copy of our Basel IV book

Basel IV Academy - opens soon

Knowledge transfer and professional discussions. Prepare yourself and your employees at an early stage for the Basel IV regulations and register early for the PwC Basel IV Academy.

Here, knowledge is conveyed in an ideal atmosphere of joint discussions on professional questions within the framework of case studies. To meet your personal requirements, we offer you three versions of our Basel IV Academy. Choose between

• a flexible online seminar,

• a three-day presence with hands-on case studies or

• a C-Suite event that also highlights the strategic implications of Basel IV.

The link to our registration page will be released soon on this site!
 

Download the Basel IV academy flyer

Contact us

Martin Neisen

Partner, Global Basel IV Leader, PwC Germany

Tel: +496 9958 53328

Abdellah M’Barki

Partner, Global Basel IV Deputy Leader, PwC Netherlands

Tel: +31 612134687

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