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Bank Failures: 7 Potential Regulatory Responses to Anticipate Now


Fifteen years after the 2008-09 global financial crisis, bankers, regulators, and lawmakers on both sides of the Atlantic are revisiting longstanding debates on how depositors and investors can gain a wider window into banking operations and lenders can tap ready cash. The current rash of bank failures in the US, coupled with the forced sale of Swiss stalwart Credit Suisse, has once again upset assumptions about the industry’s health.

US and European regulators are fanning long-smoldering discussions on bank supervision and regulatory reforms to head off future shocks. The prior financial crisis stemmed from credit risk. The focus now is on bolstering banks’ liquidity, which is likely to lead to stricter accounting requirements, more stress tests, and fresh looks at regulating investments and insuring deposits—all of which require banks to shore up their own risk management, interest rate modeling, and economic stress-testing capabilities. The most astute are laying the groundwork now, including:

  • Preparing balance sheet analysis for valuing long-duration securities at market value
  • Reassessing the cash flow characteristics of their financial instruments to show who’s holding deposits and how likely they are to pull their money
  • Considering “ring-fencing” their retail banking businesses from their riskier investments and better managing corporate finance activities
This ebook will provide a new perspective on the changes that are coming and how to prepare for them, including the role of balance sheet management and asset liability management software.