In short, a time-consuming and costly process for the institution. The general tendency among institutions is to view regulatory obligations as a burden to bear. One of the principal causes of disgruntlement is that regulatory reporting often has little effect on an institution s ability to generate profit. More relevant, perhaps, is that the objectives of many of the reports for example to reduce exposure to market risk often fail in their objective to quantify the genuine risks in an institution s trading book. Perhaps the negative view of regulatory obligations needs to be reassessed.
Risk management begins with risk measurement.
This figure is conservative. In the present climate, finding the right staff, and perhaps more importantly, keeping them, is proving difficult. Little wonder that in the to reduce costs, banks have looked at other ways to produce reports, or rather to make their regulatory personnel as productive as possible. Technology can be of great assistance. The tasks required to produce regulatory reports are largely administrative, and can thus be greatly automated.