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CBS-4 Treasury & Capital Markets
Introduction
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Establishing impact tolerances is a critical step in operational resilience, ensuring that AmBank’s Treasury & Capital Markets functions can continue operating effectively under disruptive events.
Impact tolerance defines the maximum level of disruption that can be tolerated before the bank experiences unacceptable harm to customers, the financial system, or regulatory compliance.
This chapter focuses on CBS-4, encompassing Treasury & Capital Markets, which plays a pivotal role in managing market risk, liquidity, and client investments.
By assessing each Sub-CBS process within CBS-4, AmBank can define Maximum Tolerable Downtime (MTD) and Maximum Tolerable Data Loss (MTDL), identify potential customer and regulatory impacts, and prioritize resilience initiatives. This structured approach ensures regulatory compliance and safeguards the bank’s financial stability while supporting stakeholder confidence.
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Table P4: Establish Impact Tolerance for CBS-4
|
Sub-CBS Code |
Sub-CBS |
Maximum Tolerable Downtime (MTD) |
Maximum Tolerable Data Loss (MTDL) |
Customer Impact |
Regulatory Impact |
Impact Type |
Current Resilience Status |
Action Required |
|
4.1 |
Foreign Exchange (FX) Trading |
2 hours |
15 minutes |
High disruption affects currency conversion and client transactions |
High – must comply with BNM and MAS FX settlement requirements |
Financial & Operational |
Moderate – redundancy in trading platforms |
Implement enhanced failover systems; increase real-time monitoring |
|
4.2 |
Interest Rate & Money Market Trading |
4 hours |
30 minutes |
Medium – affects funding costs and interbank settlements |
Medium – regulatory reporting obligations |
Financial & Operational |
Moderate |
Review backup trading systems; conduct periodic simulation tests |
|
4.3 |
Derivatives & Structured Products |
6 hours |
1 hour |
High – affects client hedging and investment strategies |
High – regulatory reporting and risk management obligations |
Financial & Operational |
Moderate |
Strengthen risk model redundancy and trade reconciliation |
|
4.4 |
Fixed Income & Debt Instruments Trading |
4 hours |
30 minutes |
High – affects bond issuance and investor settlements |
High compliance with securities regulations |
Financial & Operational |
Moderate |
Enhance automated reconciliation; ensure backup systems are active |
|
4.5 |
Capital Markets Origination & Syndication |
8 hours |
2 hours |
Medium – delays in capital raising for clients |
Medium – must comply with disclosure rules |
Operational |
Low |
Develop an alternate execution workflow; improve document digitization |
|
4.6 |
Debt Capital Market (DCM) Solutions & Advisory |
8 hours |
2 hours |
Medium – advisory services delayed, impacting client projects |
Medium – regulatory notifications may be delayed |
Operational |
Low |
Establish manual advisory procedures; ensure system backups |
|
4.7 |
Asset Liability & Balance Sheet Management (ALM) |
12 hours |
4 hours |
High misalignment in funding and liquidity management |
High – breach of liquidity ratios |
Financial |
Moderate |
Implement automated ALM monitoring; integrate with contingency planning |
|
4.8 |
Market Risk Analytics & Reporting |
6 hours |
1 hour |
Medium – delay in risk assessment may impact trading decisions |
High – reporting to regulators may be delayed |
Operational & Regulatory |
Moderate |
Upgrade risk analytics infrastructure; establish real-time dashboards |
|
4.9 |
Post-Trade & Settlement Operations |
2 hours |
15 minutes |
High – delayed settlements affect clients and counterparties |
High – must comply with clearing and settlement rules |
Operational & Regulatory |
Moderate |
Enhance settlement automation; create alternative settlement paths |
|
4.10 |
Regulatory & Compliance Governance |
12 hours |
N/A |
Medium – regulatory reporting and compliance checks delayed |
High – breach of statutory requirements |
Regulatory |
Low |
Strengthen compliance monitoring; implement audit-ready reporting |
|
4.11 |
Client Relationship & Sales Support |
24 hours |
N/A |
Medium – client inquiries delayed |
Low – minimal regulatory impact |
Customer Service |
Moderate |
Establish contingency client support team; deploy CRM backup systems |
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Setting impact tolerances for CBS-4 Treasury & Capital Markets ensures AmBank can sustain critical financial operations during disruptions, protecting both clients and regulatory compliance. By defining MTD and MTDL for each Sub-CBS, the bank gains a clear view of operational vulnerabilities and prioritizes investments in resilience measures, including system redundancies, process backups, and risk monitoring.
This chapter highlights the importance of a structured and measurable approach to operational resilience: understanding thresholds for tolerable disruption allows AmBank to prepare, respond, and recover effectively while maintaining market confidence. Implementing these impact tolerances aligns with regulatory expectations and positions the bank to navigate operational risks proactively.
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Gain Competency: For organisations looking to accelerate their journey, BCM Institute’s training and certification programs, including the OR-5000 Operational Resilience Expert Implementer course, provide in-depth insights and practical toolkits for effectively embedding this model.
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