Quick Check Basel II

Basel II - the systematic approach

Since January 2007 the body of rules and regulations of Basel II is mandatory for credit institutions. It is high time to start establishing adequate links between the relevant data for the capital calculations. The results of the rating models must be included in the credit margin calculation; a history of client, collateral and transaction data must be drawn up and appropriate reporting capabilities must ensure that the management can control risks and returns on a daily basis. This requires Basel II-compliant data warehousing and a powerful kernel.

With comprehensive experience in numerous Basel II projects at universal banks and specialised financial institutions, we are in a position to offer efficient and competent support in all concept-related issues and the technical implementation of your ideas:

• Establishing Basel II-compliant data warehousing as either an in-house solution or by using standard software
   
• Developing specific internal rating models, as well as validating existing rating models
   
• Implementation of Pillar II and Pillar III
   
• Setting up risk-sensitive portfolio management systems 

What progress has your institution already made towards comprehensive implementation of Basel II and modern credit risk management? Our established Basel II QuickCheck can provide you with a qualified response to that question tailored to your particular situation in only a few days.

• Analysis of the technical requirements (plan for the validation of the internal rating models, for stress and backtesting, data history, etc.) 
   
• Analysis of your existing system landscape and its reporting capabilities
   
• 'Buy or make' decisions for implementing Basel II-compliant data warehousing and rating models
   
• Cost estimate and rough timescale for establishing internal rating models and reporting tools

The fact that we cooperate with leading system providers and major system houses means that our independent examinations can provide you with tailored solutions.

How does the QuickCheck work?

Our experts perform on-site assessments to determine the sort of system architecture that your company will require in order to implement Basel II, so as to ensure optimum compliance not only with the regulatory requirements, but also with your own lending management requirements. This involves developing a dedicated system architecture on the basis of the planned approaches (e.g. standard or IRB advanced). We then produce an implementation proposal based on the existing IT architecture (e.g. core banking systems, client information systems, collateral management, reporting, ALM systems, etc.) and taking into account the cost/benefit relationships. The proposal is discussed with you. Finally, we draw up an implementation plan based on this proposal (selection and introduction of standard software/expansion of an in-house solution) which includes a cost estimate.

How much does the QuickCheck cost?

The QuickCheck takes around 5 working days and is performed by a team of 2-3 d-fine specialists. The clear structure of the QuickCheck means that costs can be kept at a minimum and concrete results achieved. The total cost will be between €15,000 and €35,000 including all ancillary costs (plus statutory VAT).

What do you have to do?

You should provide in-house specialists who are available for discussion in order to ensure that our analyses and proposals are as closely tailored to your institution as possible. We also require an overview of your various business areas and the planned Basel II approaches for each of these areas. An overview of the current system landscape, as well as your institution's medium-term plans, is also helpful.

How much notice do we require?

The date for the QuickCheck can generally be agreed one month in advance.

Which types of bank are best suited to the QuickCheck?

The QuickCheck is best suited to smaller and medium-sized institutions for which efficient networking of the existing system architecture or the deployment of an integrated standard solution are both viable options.

What sort of experience is the QuickCheck based on?

Our experience in the implementation of Basel II encompasses both major international banks and small specialised institutions. We have already implemented solutions based on both in-house systems and integrated standard systems, which means that we can find an appropriate solution to meet your needs, too. The QuickCheck Basel II is based on this experience and allows us to produce a preliminary qualified analysis within only 3-5 days.

What is the next step?

If you have further questions on the QuickCheck, please do not hesitate to contact us:

Dr. Egbert Schark
Tel.: +49 0 69 90737 -302