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Consensus needed on cloud security

November 12, 2018 / Nazneen sherif

If banks had been hesitant to move their data and processes to the cloud, recent regulatory requirements have certainly provided a final nudge in that direction. The revised market risk regulation finalised by the Basel Committee on Banking Supervision at the start of 2016 – the Fundamental Review of the Trading Book (FRTB) – is expected to overhaul existing risk calculations at banks, making them more computationally demanding. One recent industry analysis estimates portfolio risk calculations could be expected to increase as much as tenfold. It doesn’t help that pricing calculations are also becoming increasingly complex, requiring banks to factor in adjustments because of various costs associated with counterparty risk, funding, capital and initial margin – collectively known as valuation adjustments, or XVAs – into prices. In the past, larger banks have thrown money at computational problems, investing heavily in their own data centres and advanced tec...