|
|
|
|
| Publications |
Banker's Journal Malaysia | Paper Synopsis | Issue
123
|
|
|
2002
(Issue No. 123)
Do
Bankers Discriminate Against Women Entrepreneurs?
Dr Rosli Mahmood, Asiah bt. Bidin and Habshah bt. Bakar
Synopsis
Ten
Principles of Sound Practices in Operational Risk Management
by Asim Das
The Basel Committee on Banking Supervision has published ‘Sound
Practices for the Management and Supervision of Operational Risk?as a set of
principles that provide a framework for the effective management and
supervision of operational risk. The Sound Practices are meant for use by
banking institutions of all sizes and sophistication, and by supervisory
authorities when evaluating Operational Risk Management policies and practices
of an institution. These principles provide a common platform on which
individual supervisors can develop the standards and guidelines for their
jurisdiction. Regulators in the United Kingdom and European Union have already
issued draft guidelines based on the Basel II proposals. Other regulators are
expected to follow suit, perhaps following the publication of the final version
of the new Accord, expected by end-2003. This article discusses some of the
relevant questions that banking institutions need to ask themselves in order to
evaluate to what extent they are in a position to comply with these principles.
Top
Adopting a Practical Approach to Organisational Risk Management
by John Meinhold, Kevin Kwek and Douglas Jackson
The mega-losses of large banking
institutions, such as Barings Bank and Allied Irish Bank, have awakened banking
executives around the globe to the risks they face through failing to
effectively control the risks posed by their everyday operations. According to
a study by the British Bankers? Association and Robert Morris Associates,
losses attributable to operational risks exceeded US$7 billion worldwide in
1998 alone. Financial institutions are starting to recognise operational risk
management as being as important to business success as sound management of
credit and market risks.
Different banking
institutions, however, are at different points along the operational risk
management (ORM) evolutionary path. This paper is based on A.T. Kearney's
research and work in ORM, where they see four basic stages of ORM capabilities,
namely (1) traditional, (2) embryonic, (3)
transitional, and (4) mature. A.T. Kearney estimates the majority of banks are
currently positioned in Stage 1, where there is no formal, comprehensive
assessment of operational risk exposures and drivers.
Top
An
Integrated Approach to Basel II Compliance
by Lars Schiphorst
This paper is a summary of the
author's presentation delivered at the Conference on Gearing Operational Risk
Management towards Basel II Proposals organised by Institut Bank Bank Malaysia.
All financial institutions are impacted by the New Basel Capital Accord. It
increases both the extent of risk management they are required to undertake,
and the level of disclosure they are required to make on a periodic basis to
the market, additionally it redefines the levels of regulatory capital (capital
adequacy) that they need to hold. Implementation of these new regulations,
currently scheduled for the start of 2007, within a financial institution will
require significant changes to processes, policies and information systems.
Basel II touches most of the core information systems that underpin a financial
institution.
This paper describes the main features of a
program developed by Unisys to assist financial institutions achieve compliance
in a timely and cost effective manner whilst minimising implementation impacts
on the institution.
Top
Basel II (Operational Risk): Challenges and Hurdles for
Southeast Asian Banks
by Pedro Garcia
In the new Basel Capital Accord,
the Basel Committee on Banking Supervision's proposal consists of three
mutually reinforcing pillars, which together should contribute to increasing
the safety and soundness of the financial system. The Committee is seeking to
implement a more risk-sensitive and flexible approach to bank capital
requirements than that established by the 1988 Capital Accord. At the same
time, the Committee aims to align supervisory review more closely with the way
in which banks manage their risks, including encouraging the use, and further
development, of internal risk and capital management systems. One of the most
notable changes in Basel II is the introduction of a capital charge for
operational risk.
Due to the extensiveness and complexity of Basel II, Southeast
Asian banks are now facing many challenges and hurdles in implementing the
requirements for operational risk, some of which are discussed in this paper.
Top
Maximising Shareholder Value ?The Implications of Basel II
by Chris Matten
The 1988 Basel Accord stated two goals, namely to strengthen the
soundness and stability of the international banking system; and to level the
playing field for internationally competitive banks. However, the author points
out that these goals are not always mutually compatible, as is often seen in
the dual role of banking supervisors in many countries where, in addition to
supervision/regulation of banks, many banking supervisors are also charged with
promoting the financial services sector in their respective countries.
This paper discusses the likely impact of the Basel II proposals on
banks?efforts to increase shareholder value, and also looks at the expected
benefits from the implementation of Basel II, the associated costs and downside
risks, and how closely the Basel II proposals match the development of internal
risk models.
Top
Do Bankers Discriminate Against Women Entrepreneurs?
by Dr
Rosli Mahmood, Asiah bt. Bidin and Habshah bt. Bakar
In the last decade,
there has been a significant increase in the number of businesses started by
women in Malaysia. A number of studies on women entrepreneurship have found
that many women who want to go into business were hampered by their inability
to secure loans from the banks. These women often claimed that they were been
discriminated against in both overt and subtle ways. Hisrich (1985) asserts
that while financing is a problem for every entrepreneur, for women
entrepreneurs the problem is more acute. Thus, women entrepreneurs are less
likely to use formal sources of capital such as bank loans. This paper reports
on the findings of another research which studied the extent to which gender
may be the issue in the banker-customer relationship.
Top
Importance of Corporate Financial Theories?Implication in
Explaining Rights Issue Announcements?Effects in an Emerging Market Environment
by Dr Nur-Adiana Hiau Abdullah
It is assumed that corporate finance theories developed in the USA are
generally applicable and relevant to the emerging market economies. However, we
have hardly seen any of the relations associated with these theories being
addressed to the Malaysian environment. This paper aims to shed light on
specific long-term financing issues in Malaysia. It examines the effect of some
rights issue announcements on stock prices in Malaysia, using a sample of 70
local companies listed on the Kuala Lumpur Stock Exchange. The author found
that none of the signalling, asymmetric information, agency, perfect
substitution hypothesis and Scholes?information hypothesis models was able to
explain the existence of a positive abnormal return associated with the
announcements. It thus appears that, on a preliminary basis, these theories may
be more applicable to a developed exchange rather than to an emerging market.
The results are, however, more consistent with the price pressure hypothesis.
Top
Back |
|
|
| |