Risk: Risk-Based Capital

Risk-based capital insights are critical to the effective deployment of resources in financial institutions. Regulatory and rating agency approaches to measuring capital have been evolving towards economic capital approaches. For leading institutions, the challenge today is how to use the information from these tools to improve and sustain quality earnings. For other institutions, it is to understand how the insights from these tools could affect their decisions and invest in them in ways that will have the greatest effect on their strategies and tactics.

Novantas helps institutions integrate risk-based capital information and insights into business line measurements of performance and decision models. We have extensive experience developing and using risk-based capital measurements and we know how to put these measures into usage in strategic and day-to-day business decisions.

We work with clients to implement Basel II compliant risk-based capital systems and processes. We work with clients throughout the development and implementation of Basel measurement for Pillar I compliance and for overarching Pillar II measurements in line with the inherent risks of the institution.

We support corporate-level measurements and decisions to direct capital to its most productive usage, value new business opportunities, set overall corporate financial objectives for capital usage, return on risk-adjusted equity and risk-adjusted profit margin.

We help institutions make better day-to-day business line decisions using risk-based insights to improve loan pricing, performance measurement and incentive compensation.