Basel Regulatory Commission Questions Large Bank Risk Controls

As an increasingly uncertain French election approaches – with the communist candidate now garnering 18% of the vote, according to polls out this weekend – Moody’s is out with a jarring report on deficient risk reporting systems utilized by the systemically important banks. Why are these two seemingly unrelated issues connected and so important? As previously reported in ValueWalk, if France leaves the euro currency there is potential for the bank’s non-cleared derivatives risk contracts to be re-written or potentially triggered. The directional exposure of big bank’s non-cleared derivatives remains unknown, which is at the core of the problem of…