China Minsheng Bank Adopts Bloomberg’s Data Solutions for FRTB Implementation

Bloomberg’s FRTB Standardized Approach solution to help the bank meet FRTB reporting requirement

Beijing – Bloomberg today announced that China Minsheng Bank, a leading commercial bank in China, has adopted Bloomberg’s solution for FRTB Standardized Approach (SA) bucketing as the bank accelerates the implementation of the Fundamental Review of the Trading Book (FRTB). FRTB, issued by the Basel Committee for Banking Supervision (BCBS) to revamp how banks across the globe approach market risk capital across their various trading lines of business, is one of the most significant proposed regulatory changes to come from post-financial crisis reforms known as Basel III. Banks need to start reporting the risk and capital measures required under FRTB by January 1, 2023.

“The implementation of FRTB for commercial banks in emerging markets, such as China, is not just a mandate to upgrade their data, analytics and workflow capabilities, but also an opportunity to enhance their market risk management to be aligned with global best practices,” said Hui Zhao, Head of Risk Department at China Minsheng Bank. “To ensure a reliable frame of reference and consistency that FRTB requires, data governance is key. Bloomberg’s FRTB solution and market data stands out for its scope, reliability and consistency. It is easy to access and implement, which helps us save more time to be FRTB-ready.”

FRTB requires banks to adopt a rigorous approach to how they source, manage and use their market data to ensure the necessary alignment across the front office, middle and back office including risk and finance functions. Banks can choose from Standardized (SA) and Internal Models Approaches (IMA) under FRTB. The SA requires all banks to calculate a prescribed and comprehensive set of market and default risk sensitivities for all their trading book positions. Building on industry leading reference data, Bloomberg’s FRTB SA solution provides rule-based, region specific and consistent bucketing data by incorporating ongoing industry feedback and consensus. The SA solution enables banks to automate the implementation of FRTB and streamline their data workflows via Data-as-a-Service (Daas). Post implementation, banks can more quickly and accurately monitor changes in risk capital in their regulatory reporting.

“Banks continue to face data and modeling challenges in their implementation of FRTB capital requirements, which has been exacerbated by market uncertainty and volatile markets,” said Heena Chakravorti, APAC Head of Enterprise Data at Bloomberg. “We are pleased to support China Minsheng Bank’s journey to comply with complex FRTB requirements, which is a catalyst to review how they currently source and use data across the firm, and make enhancements that will be beneficial beyond FRTB.”

To read more about preparing for FRTB implementation, click here.

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