Regulatory Reporting: References

For many years we successfully support financial institutions in implementation of professional requirements for reporting system.

Project summary

A German Landesbank needs to implement an additional BAIS instance for reporting on the group level (including IFRS figures) according to the German "Group Financial Statements Transition Ordinance" (Konzernabschlussüberleitungsverordnung, KonÜV).

Nagler & Company tasks

In addition to the handling portions of the project management, Nagler & Company handled legal questions and issues surrounding data delivery, implemented reporting for the subsidiary bank, and ensured the correctness of the GroMiKV reports (for German regulation dealing with large credit sums). Furthermore, changes were ordered to various preprocessing programs with stakeholders throughout the bank.

Approach

The first step of the project was to identify which reports would be affected. Since most changes were to values within existing reports, a solution with minimal changes to software architecture was pursued. The given BAIS instance for generating HGB reports was cloned for use as an IFRS report generation tool (for German solvency "SolvV" regulation and GroMikV) for the group.

The upstream BARIS system was not cloned. Instead, HGB and IFRS data was generated daily. To do this, data deliveries to BARIS from upstream and subsidiary systems (especially those the of trading division) had to be adapted. BARIS was built into a "switch", so that different batches of HGB and IFRS data could be mapped within the software. Most notably, Exposure-at-Default calculations needed to be added. Using this data and a separate IFRS-compliant capital-holding calculation, the new BAIS-cloned IFRS instance was able to generate correct group reports.

Client benefit

The client can now generate reports compliant with the new legal requirements (those of German regulation on calculating capital requirements for financial institutions and holding groups using group-level consolidated and interim financial statements), using IFRS data.

Project summary

To comply with pending Basel II/Pillar 3 disclosure requirements, a German Landesbank launched a disclosure subproject as part of its Basel II project. The goal was to produce a sample report for the first phase of the technical design, and then prepare and publish the finalized report as the first official disclosure. This process would then be handed over to the bank's operations.

Requirements and procedures for disclosure had to be revised with the introduction of Basel III.

Nagler & Company tasks

Nagler & Company drafted the basic approach for generating a disclosure report, and enumerated requirements for the delivery systems to comply with German solvency law (SolvV).

Approach

The approach is based on an iterative refinement. The client described a broad process flow for disclosure report generation on highly aggregated level. This was used as a roadmap of the essential steps throughout the project.

The exact process definition for each disclosure report was then built out of this broadly defined basis. A detailed definition was drafted for each quantitative disclosure table.

Since the report was published on the client's website, qualitative and quantitative accuracy had top priority. Qualitative text passages were often taken directly from the risk report, so they could be checked against the original report. For the quantitative tables, capital and risk-weighted assets were checked against Pillar I of Basel II.

Data for risk provisioning was checked against the annual report. In addition to these qualitative and quantitative checks, text passages were checked against the table entries. In the following round, contradictions and duplications were removed, and links between the two parts were added.

Finally, a change process was defined, presented as a time-line with a responsible owner for each step.

To finalize the disclosure report, quantitative tables and qualitative text components were laid out in a template.

The legal and internal requirements for data archiving were enumerated in a separate disclosure archiving concept document.

Solution

The trial disclosure report was prepared according to the procedure described above, and the procedure was handed over to the client. The client has since used this tool to generate disclosure reports and publish them to its website for the public.

Client benefit

Efficient preparation of disclosure reports.

Project summary

Dr. Nagler & Company was commissioned to support a project introducing regulatory the reporting software BAIS to major German bank at the beginning of 2012. Four consultants coordinated based on their areas of expertise in German solvency regulation (SolvV), capital requirements, German major lending regulation (GroMiKV), and BAIS parameterization. As a team, they also addressed common interdisciplinary issues surrounding report generation processes and integration of subsidiary data.

Nagler & Company tasks

The individual work packages' implementation required close cooperation with the vendor BSM, to adapt the software to the specifics of the bank's business landscape. The project's goal was to generate individual reports in the exact same form they had with the preexisting system, all while overhauling and optimizing the report-generation software process.

A revised concept for reporting was especially necessary because the institute sold one of its subsidiaries and split one of its reporting units.

Client benefit

The primary goal was a regulatory reporting software deployment that fully satisfied the client's needs. These requirements were fulfilled effectively and on-schedule, so that individual reports could be generated with minimal manual intervention.

Michael Brinkmann Nagler & Company
Contact Person

Michael Brinkmann

Location München

+49 89 21 11 36 70

E-Mail

Expertise