Compliance with the CCAR stress testing regulations is a complex and expensive exercise for those banks to which it applies. Dodd-Frank Act stress testing requirements (DFAST) can be equally complex and expensive exercise if the same methodologies used for CCAR are applied to DFAST. By using a top-down approach to estimating stressed pre provision net revenue (PPNR) and net charge offs with pooled data community and medium sized commercial banks can both comply with the regulations and have a tool to assess their capital requirements not only under stressed economic conditions but alternative strategic scenarios. This methodology is distinguished from other models currently in the marketplace by being: statistically driven; using a minimum of judgmental assumptions; and eliminates the need for banks to incur costly data/IT projects.
About: RiskGroup360 is a highly specialized and targeted analytic consulting firm providing financial institutions with comprehensive and affordable 360 degree past, present and future approaches to development of custom risk management solutions and maintenance of regulatory requirements. Our team brings unique industry experience and expertise to client risk identification, project design, development, maintenance and regulation.
Founded by former senior executives of model vendor firms and large financial institutions, the principals of RiskGroup360 have over 60 years’ experience in developing, implementing, validating both custom and generic models as well as vetting models and modeling processes with governmental regulators.
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