Digital twin and Interest Rate Risk in the Banking Book: Difference between pages

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imported>Doug Williamson
(Created page with "''Information technology.'' A virtual representation that serves as the real-time digital counterpart of a physical object or process. :<span style="color:#4B0082">'''''Dig...")
 
imported>Doug Williamson
(Mend link.)
 
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''Information technology.''
''Bank supervision - capital adequacy''


A virtual representation that serves as the real-time digital counterpart of a physical object or process.
(IRRBB).


IRRBB deals with the risks associated with a change in interest rates, and affecting a bank's banking book, as opposed to its trading book.


:<span style="color:#4B0082">'''''Digital twins can help treasurers'''''</span>


:"The use and potential of digital twins is growing...
IRRBB includes potentially adverse effects on earnings, capital, or both.


:Being able to dynamically capture and process large amounts of data from multiple sources and using artificial
Sources of IRRBB include interest rate gaps, basis risk, yield curve risk and option risk.
intelligence techniques such as machine learning to exploit it, is taking digital twins into financial services.  


:Digital twins can, for example, help treasurers to improve cash and liquidity forecasting or reach business sustainability goals – and they will be building blocks in the metaverse."


:''Lesley Meall - freelance technology journalist - The Treasurer, Issue 4 2022 - December 2022, p36.''
IRRBB is treated by most regulators worldwide as a Pillar 2 risk.




== See also ==
== See also ==
* [[Artificial intelligence]]
* [[Banking book]]
* [[Cash forecast]]
* [[Basis risk]]
* [[Digital]]
* [[Capital adequacy]]
* [[Digital representation]]
* [[Economic value of equity]] (EVE)
* [[Digital technology]]
* [[Interest rate risk]]
* [[Digitalisation]]
* [[Interest rate gap]]
* [[Financial services]]
* [[Market risk]]
* [[Fintech]]
* [[Market Risk in the Banking Book]] (MRBB)
* [[Information technology]]
* [[MCRMR]]
* [[Liquidity]]
* [[NII]]
* [[Machine learning]]
* [[Pillar 2]]
* [[Metaverse]]
* [[Option risk]]
* [[Sustainability]]
* [[Shock]]
* [[Trading book]]
* [[Yield curve risk]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Identify_and_assess_risks]]
Line 36: Line 37:
[[Category:Risk_frameworks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Risk_reporting]]
[[Category:Technology]]
[[Category:Financial_products_and_markets]]

Latest revision as of 09:24, 24 June 2022

Bank supervision - capital adequacy

(IRRBB).

IRRBB deals with the risks associated with a change in interest rates, and affecting a bank's banking book, as opposed to its trading book.


IRRBB includes potentially adverse effects on earnings, capital, or both.

Sources of IRRBB include interest rate gaps, basis risk, yield curve risk and option risk.


IRRBB is treated by most regulators worldwide as a Pillar 2 risk.


See also

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