Subsequent to the implementation of Basel II, Basel III aspires to rectify those hidden shortcomings that became visible in times of crisis within the banking system. The measures include raising the quality of capital, setting up buffers for large banks, adding charges for counterparty credit risk and considering a very weak leverage ratio.

On the other hand, Basel III aims to deal with liquidity coverage issues in respect of problems on meeting counterparty commitments (derivatives and repos in particular). It is also working on stable funding to avoid excessive dependence on short-term wholesale funding to fund long-term assets. With higher costs and closer scrutiny led by Basel III, banks will strive to redefine their models with a view to optimizing the use of capital and liquidity. To thrive from the new requirements, a bank has to abandon off-the-shelf risk solutions that stifle their competition but to grasp tools that sharpen their vision of customers, markets and the economy at large - a holistic strategic approach to steer the bank toward the forefront of success.

CT RISK serves a new generation of risk modelling that goes beyond transparency and reinforces banks’ ability to anticipate competitive advantages and excel their counterparts amid the regulatory change. With expertise on bank risk management under the Basel II/III framework in Asia, CT RISK has ever architected the first Basel-standard internal ratings-based (“IRB”) system in Hong Kong.