Solutions for Banks



In the wake of the financial crisis, the banking sector has confronted myriad new and evolving regulations aimed in part at ensuring that institutions can remain solvent and withstand a wide range of risk scenarios. In many cases, compliance with these regulations demands data that spans banking divisions, from risk management to compliance, and asset classes, from traditional retail exposures in the banking book, to fixed income and derivatives in the trading book. What's more, it can require insight not just into a bank’s own activities, but also into its clients and partners.

An established leader in compliance reporting, risk analysis and liquidity metrics, MSCI has the in-depth expertise and solutions that banks can leverage to navigate their global compliance reporting landscape.


SFDR Reporting Solutions

European Union’s new Sustainable Finance Disclosure Regulations (SFDR) requires certain financial market players serving EU investors to consider ESG risks and make ESG disclosures at the entity and financial product level. Financial firms with 500+ employees doing business in the EU must submit their first regulatory report by June 2023 with the reference period for the metrics starting in July 2022.1

A leader in sustainable finance solutions, MSCI offers a holistic toolkit to support you in meeting your regulatory reporting requirements which can evolve with the ESG and climate-related regulatory environment. The MSCI EU Sustainable Finance Module, launched in February 2021, can now be combined with a reporting solution built on the strengths of our ESG and Analytics research. Our what-if, portfolio construction, stress testing, and security selection tools can also assist institutional investors seeking to construct portfolios in line with SFDR.

Sophisticated ESG Analytics across multi-asset class securities

  • Metrics based on extensive research, deep insights into EU regulations and quality data sourcing
  • Broad coverage with more than 10,000 corporate equity and fixed income issuers, with issuer-to-instrument mapping including derivatives and coverage across multiple other asset classes like sovereign bonds

Operational efficiency

  • One-time upload of your portfolio that can be leveraged across reports
  • We can process large numbers of portfolios across multiple asset classes
  • Reporting is scalable, customizable, and built to meet your needs

Transparency and monitoring (analytics validation)

  • Ability to monitor and gain transparency into what is driving the entity-level numbers
  • Monthly reporting at a portfolio level with additional asset level diagnostic report
  • Customizable reporting to incorporate client views on portfolio aggregation

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Economic Capital

Consolidate and compare risks and opportunities across the entire banking book, including bonds, credit derivatives and traditional retail exposures.

MSCI's cutting-edge analytics, speed and distribution capabilities aim to help empower banking clients to analyze positions, opportunities and risks across lines of business. Keep pace in a dynamic environment and quantify overall credit risk by capturing market exposures, rating changes and default risks within Value at Risk (VaR) and Expected Shortfall frameworks.

The solution calculates Credit Risk due to migration and default of the banking book using CreditMetrics®, which allows clients to quickly and efficiently measure and report Concentration Risk and Contributions to Economic Capital.


Regulatory Capital

The Basel Committee on Banking Supervision's (BCBS) revised rules for minimum capital requirements under its Fundamental Review of the Trading Book (FRTB) regulations specifies two capital charge approaches: the mandatory Standardized Approach and the optional Internal Model Approach.

MSCI combines robust analytics and market data via a new Capital Module in RiskManager, which banks can use to help comply with the Standardized Approach and the Internal Model Approach. Our expertise in modeling complex risk calculations and our data and reporting infrastructure enable us to help clients by offering an end-to-end solution for the Standardized Approach and an analytically focused solution for the Internal Model Approach.

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Stress Testing

Stress testing is now typically a central component of banking regulations globally, as Basel has shifted stress testing from a recommendation to a requirement. MSCI offers analytics and tools to help banks satisfy these requirements across many jurisdictions. These include the Comprehensive Capital Analysis and Review (CCAR), which is an assessment mandated by the U.S. Federal Reserve to determine whether large banks have sufficient capital to endure idiosyncratic and economic risks. Clients also leverage MSCI stress testing models to measure the impact of the Bank of England and European Banking Authority stress scenarios.

MSCI's research team has designed a robust set of granular risk factor and model parameter stress tests to support firms in calculating Trading Book Profit and Loss and Stressed Counterparty Exposure under various regulatory scenarios.

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