Peter Sinkis puts six questions to the Head of Treasury Development & Transformation at NAB, Gordon Allison, ahead of his ‘Banking on Change’ Seminar presentation on the emerging regulatory environment governing liquidity.
1. What’s your background in Banking?
Within Treasury, I have had experience in interest rate risk management, FTP, liquidity management, cash desk and capital. I have also spent 5 years outside of Treasury, in a range of roles across retail banking, business banking, the product house, finance, and operations.
2. What does your current role as Head of Treasury Development & Transformation focus on within NAB?
My main focus currently is on managing regulatory change for Treasury and the enterprise. This requires making decisions in an uncertain environment, preparing the business for change, and engaging constructively on industry concerns.
3. Having worked through the GFC, what do you see as the drivers of the Australian banks relative success in navigating the crisis?
There have been some excellent diagnostics performed on this issue. No doubt there were multiple factors that determined outcomes. In my view some of the more significant factors were:
– the underlying strength of the economy and, in particular, strong demand from China
– the floating currency
– a strong regulatory environment with a proactive and conservative regulator
– the four pillars policy
– well managed banks
4. What do you see as the top three upcoming regulatory challenges in the banking sphere?
Ranked by potential impact on capital, the top three regulatory proposals are:
– revised standardised credit risk weights
– capital floors and;
– the Fundamental Review of the Trading Book.
Other change, such as Total Loss-Absorbing Capacity and NSFR will have significant structural implications for the balance sheet.
5. There’s been a lot of talk about the advent of new technology in banking products (peer to peer lending, Apple pay, etc). What are some key opportunities and challenges in this space?
New technology is generating significant new opportunities in banking. This will change payments technology, assessment of credit and allocation of risk.
There are significant opportunities for the development of new deposit and lending products, and opportunities for new entrants for capital raising, payments, insurance, investment and new market platforms.
Recent regulatory change might increase the relative attractiveness of the ‘shadow’ banking sector and augment disintermediation.
6. What will your upcoming presentation at the Banking on Change Seminar focus on?
I will cover the emerging regulatory environment governing liquidity, particularly the Net Stable Funding Ratio. This is a significant shift for Australian Banks, which have historically run significant structural maturity transformation. The interaction with adjacent regulatory change will also be covered: capital floors, revised standardised credit risk, stress testing, leverage ratio, operational risk, macroprudential tools, securitisation, countercyclical capital buffers, Total Loss-Absorbing Capacity , Interest Rate Risk in the Banking Book, Credit Valuation Adjustment, Standardised Approach to Counterparty Credit Risk, Fundamental Review of the Trading Book.
Registration is now open for the Banking on Change Seminar featuring speaker representatives from the RBA, APRA, Westpac and Commonwealth Bank, on 16 September 2015 at the Actuaries Institute. View the program
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