With a view to contain the global financial crisis, the Emergency Economic Stabilization Act (EESA) was enacted by the Congress and signed into law by former President Bush on October 3, 2008. The Act authorized the Troubled Asset Relief Program (TARP) that would enable the Treasury to purchase (and/or insure) assets (and/or equity) from banks and financial institutions up to USD 700 billion. The regulatory agencies will have to monitor the usage of TARP funds and use this opportunity to create a stable financial system. While this program is designed help banks stabilize their balance sheets, it would result in a substantial regulatory burden. The likely increase in regulatory burden may arise from additional requirements like stress testing, model validation, liquidity risk management and additional reporting relating to asset quality and corporate governance.
Oracle Financial Services Software (OFSS) offers a set of pre-packaged solutions which include products, tools and specialized risk consulting to assist banks/financial institutions meet these regulatory requirements. These include:
Ready-to-use stress testing and and pillar II compliance application from Oracle Reveleus
A set of pre-built stress scenarios
Data model for stress testing and TARP reporting along with analytical and reporting software platform
Assets Liabilities application from Oracle to monitor liquidity, assets and liabilities
Methodology for stress testing, model validation and pillar II compliance
Methodology to improve the existing practices of liquidity risk management, including customer behavior, wholesale deposits and cash-flow generation for derivative instruments
Dashboards and reports for regulatory compliance and risk management.
Banks/Financial institutions can use our offering to:
Assess the impact of extreme but plausible events on risk and capital requirements
Obtain a holistic enterprise-wide view of risk that enables both operational and strategic decision-making
Compute capital required to cover risk and comply with regulatory requirements under Pillar II of the Basel II Accord as well as with the requirements of TARP.