Our CTO, Burkhard Heppe, recently participated in a conference organised by the Financial Sector Advisory Center (FinSAC) of the World Bank titled “Getting the financial sector reform policies right”. Participants in Vienna were mainly central banks and deposit guarantee funds from Central and Eastern Europe and Central Asia, but also from the ECB, FDIC, KDIC, and Bank of England. Considering the rising confrontation with Russia, speakers pointed out that monetary union, capital markets union and banking union complement each other and strengthen the European single market. The single market is not just a driver of prosperity, but also gives Europe a position of strength from which to advocate our values and interests.
In his panel on asset valuation as the key to successful NPL resolution, Burkhard presented NPL valuation methodologies and emphasised the role of better data. He stressed the potential for using generative AI-based automated document pipelines to accelerate loan book due diligence during bank rescue and liquidation. The Deposit Guarantee Fund of Ukraine presented an interesting study on asset auction results from the liquidation of failed banks and re-emphasised our own message that quality and enrichment of assets’ data is crucial for a successful auction. KPMG presented the new property valuation definition used in the Capital Requirements Regulation (Article 229 (1)).
The FDIC stressed the fact that mobile banking has dramatically increased the speed at which bank runs can lead to deposit outflows. When Silicon Valley Bank failed in early 2023, some 25% of deposit left the bank within 24 hours whereas less than 5% of deposits left Wachovia in 2008 within the first 30 days of trouble. The Korean Deposit Insurance Corporation (KDIC) impressed participants by being able to monitor all Korean savings bank deposits every 20 minutes thanks to a modern API-based monitoring system.
NPL Markets Ltd., London, runs an online trading platform for illiquid loans and provides data and reporting services including early warning systems to monitor, benchmark and value credit risk.
The conference presentations can be downloaded from here.
