A Few Highlights from the Greek Experience

1
Basel II
A Few Highlights from the Greek Experience
PROFILE SUNGARD RISK BREAKFAST
2
Conflicting Priorities and Regulatory Requests
The way towards Basel II compliance has been very
challenging till today. A focus on IFRS
conversions which was a high priority for
everyone with a shorter deadline had a negative
effect on Basel II Efforts.
IFRS
BASEL II
SOX?
OTHER REGULATORY REQUIREMENTS (LIQUIDITY, STRESS
TESTING QIS ETC)
3
Late Start Uncertainty caused inertia
There had been people in the Market advocating
till recently that Basel will not be implemented.
The uncertainty of the implementation date had
certainly a negative effect. FSA has expressed
already its worries about the impact of delayed
approval of the CRD on UK implementation plan.
4
Different Agenda in Basel Implementation A
less Mature Risk-wise Environment

• Mature Basel Implementation Environments
• Waiver Application (for foundation the deadline
  is in December)
• Home Host Regulation issues
• PD LGD Model Validations
• Low PD portfolios
• Op Risk Quantification challenges
• In Greece and SE Europe
• Gap Analysis
• Data Issues
• PD LGD ?? Models
• Risk Governance

5
Is it still possible? Consequences of a late
start
Time available is critical If you want to go
quickly go alone , if you want however to go far,
go with a team. African saying No time to go
with a Team, ..a few people might need to run
it. .more Regulatory focus due to lack of time
where as Basel is a one-off opportunity to
leverage risk management capabilities across the
Bank with the cooperation of every Business Line!
6
Costs seem to be lower than what surveys data
suggest
Costs in Greece probably will not be in the
magnitude of the ones that appear in most surveys
even for middle institutions
7
Capital Charges Probably Higher
Reflects probably standardized approaches due to
lack of robust PD LGD data or Foundation approach
and higher PDs
8
Capital Requirements - LGD 45
9
Important Issues and Challenges in the way forward

• A. DATA AVAILABILITY
• Lack of a clear Data Strategy (What we need for
  modeling, why, data history?)
• B. RESPONSIBILITIES FOR BOARD OF DIRECTORS AND
  TOP MANAGEMENT -SPONSORING THE BASEL II PROGRAMME
  AT THE HIGHEST POSSIBLE LEVEL
• C. ADEQUATE RESOURCES IN MODELING, OPERATIONAL
  RISK, SPECIALISED AUDIT
• D. BUY-IN FROM OUT OF RISK UNITS
• E. GROUP WIDE IMPLEMENTATIONS