:: Enhancing the resilience of the banking sector ::

Shockwaves from recent banking failures have been felt across the globe. In this context, Business Today has published a story titled “Global Banks going belly up: Lessons for India’s resilient banking sector”, which can be viewed here.

Our Managing Partner was interviewed for his views on these developments with related risks and mitigations measures, which have featured in various sections of this story and are presented below for the ease of your reference.

Best regards

Markets Team

MGC Global Risk Advisory

According to Monish G Chatrath, Managing Partner, MGC Global -

“Regulators across the globe need to assess their monitoring framework with emphasis on thresholds for liquidity and capital requirements for the banking sector. Banks on their part need to ensure the adequacy of their risk management policies, procedures and systems, which should address portfolio diversification, growth in the intrinsic net worth of their assets, quality of credit, market risk (measurement of assets sensitivity to interest rate movements) and funding risks (depositors leaving as quickly or quicker than when they came in).

Else we could see the fallout of panic buttons emanating from the rush to address capital inadequacy in the form of exit stampede (precipitous deposit withdrawals) accompanied by plunging stock prices, making a bank incapable of discharging its obligations as these fall due and consequently becoming illiquid.”

About MGC Global Risk Advisory

Recognized as one of the '10 most promising risk advisory services firms' in 2017, as the 'Company of the Year' in 2018 &, 2019' (both in the category of risk advisory services), one of the 'Top Exceptional Companies to Work For’ in 2020, amongst the ‘Top 25 Customer Centric Companies’ in 2020 and 'The Consultant of the year' in 2021 (in the category of risk advisory services); MGC Global is an independent member firm of the US$ 4.6 billion, Atlanta headquartered - Allinial Global.

MGC Global provides services in the areas of internal audits, enterprise wide risk management, control assessments (SOC, IFCR & SOX), process re-engineering, governance frameworks, IT risk advisory, GDPR, VAPT, ISO readiness, cyber security, CxO transformation and forensic services. Our Firm has the capabilities to service its clients through its offices in Bengaluru, Mumbai, NCR; and has service arrangements in all major cities in India.

About Allinial Global

Allinial Global (formerly PKF North America) is currently the world's second-largest member-based association (with collective revenues of approximately USD 4.6 billion) that has dedicated itself to the success of independent accounting and consulting firms since its founding in 1969. It currently has member firms in 99 countries, who have over 26,000 professional staff and over 4,000 partners operating from 688 offices across the globe.

Allinial Global provides its member firms with a broad array of resources and support that benefit both its member firms and their clients in the key impact areas of learning and development, human resources, international outreach, technical support, knowledge-sharing platforms through its specialized communities of practice, marketing resources, information technology and best practices in practice management.