Le magazine du trésorier - n°75 - 3ème trimestre 2011 - (Page 38)

EU COMMISSION PROPOSED STRICTER RULES FOR BANKS Would EU new bank regulation be more prescriptive than Basel III? Not completely certain. In end of July, European Commission has presented a draft regulation that aims to translate the regulatory framework previously suggested by Basel Banking Supervision Committee. These rules would be binding for banks in Europe. Somehow, EU has drafted rules that are tightening capital requirements compared to current rules and will now impose them Europe-wide. Nevertheless, these propositions seem to be in some areas less ambitious than Basel and in some others it seems that it goes beyond Basel III requirements. In case some countries make other local adjustments, the risk is obvious not to get a more level competitive playing field, as initially targeted by the Commission. Let’s not forget that the G20 has committed to implementing Basel III as a new global standard and as one of the several answers to the financial crisis. Discrepancies between the different legislations are always regrettable and could create even more distorsions on the European and world financing market. Reaching higher capital and liquidity levels is and will become challenging for weaker banks. For example, the EU doesn’t include a specific target for leverage ratio. EU accepts that covered bonds are liquid assets, EU draft would apply to all banks when Basel targets the larger ones, EU doesn’t include a net stable funding ratio, among other things.This CRD IV project will inevitably create reactions and will have indirect impacts on corporate treasurers. We will follow this interesting issue in the coming months. (for more information please visit the following web sites:http://ec.europa.eu/ internal_market/bank/regcapital/index _en.htm and www.fitchratings.com) FM ISAE 3402, FOLLOWING THE WELL-KNOWN SAS 70 There was a shift in third party assurance reporting.We could have said as the Beatles “hello – goodbye” with this new ISAE 3402 replacing SAS 70 (for more information visit: www.isae3402.com and www.isae 3402audits.com). The third party assurance reports provide users with valuable information regarding internal controls in a company. The most well-known and requested standard is the AICPA SAS 70.These last years, breakdowns in internal controls have been widely publicized and scandals brought a new focus on the importance of implementing and monitoring properly internal controls. It resulted in new regulatory changes and regulations like Sarbanes & Oxley on financial reporting. SOX regulations require clients to gain comfort over the design and operating effectiveness of service organization controls. Being SAS 70 compliant give a company a competitive advantage, reduce queries and testing from clients and auditors, provide more comfort to users, to management and generate increased awareness within the group. As it was not standardized, the idea came to get these reports harmonized and more regulated. The International Auditing and Assurance Standards Board (IAASB) has addressed this issue by proposing a new standard focused on enhancing auditors consideration of internal controls: ISAE 3402 (Assurance Reports on Controls at a Service Organization) and the USA are looking to update section 324 (SAS 70) in order to bring it more in line with proposed international standard. It is maybe too early to assess benefits of this new standard. However, all these changes contribute towards better internal controls, including in treasury departments.These new unusual acronyms will become in coming years more and more important. Some users could even think about requiring form their money market fund providers, from their banks or partners to be compliant.At least it helps getting a better awareness of needs for stronger and more effective controls. You will hear more and more about this standard in coming years. FM 38 NEWS http://ec.europa.eu/internal_market/bank/regcapital/index_en.htm http://ec.europa.eu/internal_market/bank/regcapital/index_en.htm http://www.fitchratings.com http://www.isae3402.com http://www.isae3402audits.com http://www.isae3402audits.com

Table des matières de la publication Le magazine du trésorier - n°75 - 3ème trimestre 2011

Sommaire
EDITORIAL - Rating agencies: In the spotlight once again!
FINANCIAL HIGHLIGHTS
INTERVIEW - Gaëtan Dumont, UCB Lux SA
FOCUS
FORUM OF ADVERTISERS
CORPORATE FINANCE - 15 minutes with QlikTech
TREASURERS' ASSOCIATIONS
NEWS

Le magazine du trésorier - n°75 - 3ème trimestre 2011