Monthly Archives: March 2013

Archived Posts

March 24, 2013 by: James Bone Categories: Risk Management Data Gravity – Changing the game in Big Data

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March 22, 2013 by: James Bone Categories: Risk Practices Basel III: Regulatory Capital Rule Final Draft

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In this NPR, the agencies are proposing to revise their risk-based and leverage capital
requirements consistent with agreements reached by the Basel Committee on Banking
Supervision (BCBS) in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems” (Basel III). The proposed revisions would include implementation of a new common equity tier 1 minimum capital requirement, a higher minimum tier 1 capital requirement, and, for banking organizations subject to the advanced approaches capital rules, a supplementary leverage ratio that incorporates a broader set of exposures in the denominator measure.

Additionally, consistent with Basel III, the agencies are proposing to apply limits on a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a specified amount of common equity tier 1 capital in addition to the amount necessary to meet its minimum risk-based capital requirements. This NPR also would establish more conservative standards for including an instrument in regulatory capital. As discussed in the proposal, the revisions set forth in this NPR are consistent with section 171 of the Dodd-Frank Act, which requires the agencies to establish minimum risk-based and leverage capital requirements.

March 21, 2013 by: James Bone Categories: Risk Management (SAM) Improving Cognitive Awareness through Technology

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by: James Bone Categories: Risk Practices Avoiding Integrity Land Mines by Ben W. Heineman, Jr.

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As the chief legal officer at GE for nearly 20 years, I was part of the senior management group that sought to fuse high performance with high integrity. No one was more demanding about hitting financial targets than Jack Welch or his successor, Jeff Immelt. But both knew that employees up and down the ranks face the temptation to make the numbers by fudging the accounts, cutting corners, or worse. Unconstrained, these internal pressures—made more intense by corruption in emerging markets, demanding customers, and unscrupulous competitors—can lead to corrupt capitalism.

The changes in laws, regulations, stakeholder expectations, and media scrutiny that have taken place over the past decade can now make a major lapse in integrity catastrophic. Fines, penalties, and settlements are counted in the hundreds of millions (or billions) of dollars, not the millions or tens of millions of a decade ago. And worse, in some cases (as Enron and Arthur Andersen demonstrated)—a company can actually implode.

 

March 20, 2013 by: James Bone Categories: Risk Management Risk Leadership – The Value of Independence by Bryan Whitefield

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by: James Bone Categories: Risk Management “Savage” Math

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Leonard Jimmie Savage Savage Math

 

March 17, 2013 by: James Bone Categories: Risk Management Decision-Making and Risk Management: Risk Lessons from Pilot Safety

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March 16, 2013 by: James Bone Categories: GRC Articles OCEG Red Book

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OCEG, the Open Compliance & Ethics Group has developed standards for the structure of GRC (Governance, Risk & Compliance).  Although initially focused on GRC as a risk practice OCEG has shifted focus to a new concept called Principled Performance.  OCEG has modified Enterprise Risk into a Principled Performance model that is inclusive of the COSO Enterprise Risk framework.  This shift in focus appears to imply that risk management is responsible for firm performance.

by: James Bone Categories: Risk Management Collection of risk stories from around the Globe

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by: James Bone Categories: Risk Management GRC Tools & Reviews News

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