Risk

report | McKinsey Working Papers on Risk, No. 29

Day of reckoning?: New regulation and its impact on capital-markets businesses

New regulation will dramatically lower returns in capital markets businesses. Banks can take some steps to ameliorate the effects, but the long-term health of these businesses is in question. (PDF–1 MB)more

report

Risk IT and Operations: Strengthening capabilities

The culmination of a 10-month research effort involving 44 firms on 6 continents, with input from leading financial regulators, this report presents a comprehensive perspective on the role of IT and operations in risk management. (PDF–2.8 MB)more

report | McKinsey Working Papers on Risk, No. 28

Strengthening risk management in the US public sector

As it seeks to protect the public, government takes on many of the biggest risks around. But the challenges of managing risk from the public sector are substantial. Government agencies can take five steps to improve their risk management practices. (PDF–700 KB) more

report | McKinsey Working Papers on Risk, No. 27

Mastering ICAAP: Achieving excellence in the new world of scarce capital

In the wake of the crisis regulators have put most of their energies into Pillar 1 reform. Now they are turning to Pillar 2 and the Internal Capital Adequacy Assessment Process (ICAAP) to rein in other risks and to accelerate the work on Pillar 1. Banks must rapidly develop a playbook of ICAAP strategy if they are to get out in front of this new regulatory trend. (PDF–1.1 MB) more

report | McKinsey Working Papers on Risk, No. 26

Basel III and European banking: Its impact, how banks might respond, and the challenges of implementation

Basel III will have significant impact on the European banking sector. We estimate that by 2019 the industry will need about €1.1 trillion of additional Tier 1 capital, €1.3 trillion of short-term liquidity, and about €2.3 trillion of long-term funding, absent any mitigating actions. The impact on the smaller US banking sector will be similar, though the drivers of impact vary. (PDF–594 KB) more

report | McKinsey Working Papers on Risk, No. 25

Assessing and addressing the implications of new financial regulations for the US banking industry

According to the Financial Services Roundtable, the 2,300-page Dodd-Frank Act mandates more than 200 new regulations and 67 studies and reports to be conducted by regulators over the next two years. The resulting legislation could translate into an estimated 15,000 to 20,000 pages of new rules and and compliance requirements for financial instututions (PDF–684 KB). more

report | McKinsey Working Papers on Risk, No. 24

The use of economic capital in performance management for banks

Amid heightened concern about the future of regulatory-capital requirements, economic-capital modeling is enjoying a renaissance in the post-crisis banking world. At its best, economic capital can improve banks’ capital allocation, business-performance tracking, and risk management. (PDF–404 KB)more