The evolving landscape of financial regulation continues to present challenges and opportunities for institutions striving to meet compliance standards while optimizing capital requirements. Recent proposals introduce significant updates to the Credit Valuation Adjustment (CVA) framework, aligning it with both the IFRS accounting standards and the Basel Committee’s Fundamental Review of the Trading Book (FRTB). These changes aim to create a more risk-sensitive, consistent, and fair approach to CVA risk capital calculations. This article delves into the proposed revisions, outlining the new methodologies for CVA risk capital charges, including the Basic CVA Approach (BA-CVA) and the Standardized CVA Approach (SA-CVA). We’ll also explore their implications for banks of varying capacities, as well as the results of sample calculations to demonstrate the potential impacts. Read more on our latest blog 👉 https://hubs.ly/Q02Zxk0G0
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@PwC’s ‘In brief’ highlights some key treasury topics from IFRS 18 for corporate entities, such as classification of foreign exchange differences, derivatives gains and losses and income and expenses on other financial instruments. 📖Read it here https://pwc.to/3y4D5gC #IFRS18 #Viewpoint
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@PwC’s ‘In brief’ highlights some key treasury topics from IFRS 18 for corporate entities, such as classification of foreign exchange differences, derivatives gains and losses and income and expenses on other financial instruments. 📖Read it here https://pwc.to/3y4D5gC #IFRS18 #Viewpoint
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General Manager of Financial & Administrative Affairs - Director of EMTC | Certified Corporate Finance
A key aspect of financial reporting under IFRS involves hedging risks to manage uncertainties effectively. There are two main types of hedging relationships: fair value hedges and cash flow hedges. These relationships aim to offset variations in fair value or cash flows of a hedging instrument against those of a hedged item. Under this framework, four types of financial risks can be hedged: - Price risk, which pertains to fluctuations in the value of a financial instrument due to market price changes, - Foreign currency risk, associated with fluctuations in value or cash flows due to foreign currency exchange rate variations, - Interest rate risk, involving fluctuations in value or cash flows due to market interest rate changes, - Credit risk, relating to the risk of a counterparty defaulting on obligations, leading to financial losses. By understanding and effectively hedging these risks, organizations can navigate market uncertainties and protect their financial stability. #IFRS #FinancialReporting #RiskManagement
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Automation / Manual QA Engineer |AI/ ML/ Data Scientist/ Data Engineer| Certified Scrum Master
🌍 Non-Financial Risks: A Rising Priority With increased scrutiny from the EBA and BaFin, non-financial risks (NFRs) are now more critical than ever for financial firms. But with no standard NFR taxonomy, approaches vary widely. 📊 Our latest article explores these differences and shares best practices for a strong NFR framework. Read more here: https://okt.to/2w18xU #Finance #RiskManagement #NFR #EBA #BaFin
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PwC's ‘In brief’ highlights some key treasury topics from IFRS 18 for corporate entities, such as classification of foreign exchange differences, derivatives gains and losses and income and expenses on other financial instruments. 📖Read it here. #IFRS18 #Viewpoint
IFRS 18 - Key treasury topics for corporate entities
