The January 2016 deadline for compliance with PERDARR just gets closer and closer – and while experts warn that at least some of the global systemically important financial institutions (G-SIFIs) to which the rules apply are struggling to cope, attention is also starting to focus on who’s next.
The Basel Committee’s BCBS 239 Principles for Effective Risk Data Aggregation and Risk Reporting are, says Nick Railton-Edwards in a blog at Derivatives Risk Solutions LLP, “a blend of vague and blindingly obvious; however, obvious is rarely synonymous with fully-implemented.”
Banks had a compliance schedule of three years following their designation as G-SIBs, Railton-Edwards says, noting that many banks have been classed as significant since November 2011. “Progress should be well on the way. It isn’t.”
"Tier 2 banks should see this as a blueprint"
But his words carry a warning for those banks that are not currently directly affected by the PERDARR rules: “As the demands for data-efficiency move ever more centre-stage, it is likely that the PERDARR principles will be refined and expanded, both in scope and detail; Tier 1 banks should regard the regulation very much as a work in progress, tier 2 and below should see it as a blueprint for their future.”
Elsewhere, technologist Jennifer L Costley lists some misconceptions about BCBS 239, including the fact that it doesn’t just apply to G-SIBs. The Basel Committee “strongly suggested” that national regulators also apply the Principles to banks identified as D-SIBs – domestic systemically-important banks. However, “The slow progress of many of the regulators in identifying D-SIBs has meant in practice that BCBS 239 is currently applicable to only the 30 identified G-SIBs,” she says.
She echoes Railton-Edwards’ comments about the slow progress towards compliance within G-SIBs, but adds that there may be internal disagreement about just how much more work the banks have to do: “Within the G-SIBs,” she says, “there are likely many IT leaders who are unaware of the scope of BCBS 239 and who, when assessing the broad scope of the guidelines, may not concur with the self-reported progress of their institutions so far.”