"This is a great starting point for looking at adoption of a new risk reporting standard," says Adler. The council is exploring the use of Extensible Business Reporting Language (XBRL), a software language for describing business terms in financial reports that already has widespread adoption and use through regulatory mandate around the world, as the council believes it contains the basic building blocks the industry could use to develop a consistent reporting standard. It believes the first step to enabling new transparency of risk and exposures in the financial services industry is semantic clarity - a precise method for consistently describing and reporting risk across all organisations. These inconsistencies, the IBM Data Council says, make regulatory oversight both difficult and complex. "Last July, when the first hedge funds started to go under and the Federal Reserve started to cut interest rates, we realised this would be a significant crisis that would present an opportunity to address much-needed reforms."įinancial services firms, as well as regulators and other market participants, have inconsistent methods and language for disclosing operational, market, and credit risk. "One of the things IBM has been looking at very closely is how to build better standards for measuring risk in financial services firms," says Steve Adler, chairman of the IBM Data Governance Council. ARMINK, NY - In response to an industry-wide need for standardisation of risk data, the IBM Data Governance Council is seeking input from banks and financial institutions, corporations, vendors and regulators to create a standards-based approach to risk reporting.
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