Your expert for questions
Partner Capital Markets Lead PwC Germany
Tel.: +49 69 9585-6691
Capital markets transfer financial risks, capital and liquidity between issuers of securities, or assets and similar instruments, and investors – the market participants. Brexit, digitisation, supervision, global risks, revenue churn and cost pressure – changes in the capital markets business are manifold for banks and financial services players, and will change the market structure over the next decade.
"Our mission is to build trust within markets, between issuers, investors, sellside banks and further intermediaries as well as market infrastructures. Jointly with and for our clients, we develop and optimise primary and secondary markets solutions, processes and products. Thus, our team implements necessary change and ensures viable business models for our clients as well as funding opportunities to the real economy."
We know what we are talking about based on our extensive experience: Beside our functional know-how, we deploy a sanity check on any given solution and will give you our perspective of dos and don'ts.
We do far more than just local, on-site work with you. We are also strongly integrated into the global PwC Capital Markets network and collaborate closely with our international colleagues.
Our core belief is that however complex your requirements are, the solutions need to work efficiently. This means we are committed to finding the right solution to give you an efficient run the bank process.
Recent economic and political developments, especially regarding new competitors, client demands and changing regulatory expectations, are putting capital market participants’ margins under severe pressure. This pressure is forcing firms to review their strategies and related business models in the light of new developments such as the following:
"In this challenging environment, firms are striving to adapt by searching for sustainable business models, optimising their operating models and identifying alternative investments in search of greater returns."
We can support you in these challenging times with services such as identifying how these new trends can be used to help your firm develop a sustainable business model, providing technical advice regarding legal requirements and supervisory expectations, and providing insights on how to optimise processes and controls regarding the topics above. We also advise on and support new product approvals/processes – from granular to holistic level – in all iterations up to providing holistic target operating model development and implementation, enterprise design and advice for chief information officers (CIOs). Further specific services include implementing digital products and supporting tokenisation, initial coin offering (ICO) or security token offering (STO) setups.
We can offer you an experienced, scalable team of Senior Managers and staff, with extensive industry, product, process and regulatory know-how. On the international level, we work together with our network to support our clients in staff planning and secondments.
Comparative Analysis of BaFin, ECB, TCFD and PRA Expectations.
Over and above the existing economic and political developments, capital market participants often face challenges when striving to comply with the numerous new legal and regulatory requirements. These often require parallel design and implementation projects to meet tight deadlines, and are dependent on input from business units and support functions across the organisation.
Our Capital Markets specialists here at PwC can help you assess, prepare for, and execute such transition projects. We will work with you across the entire lifecycle of the transition, including programme mobilisation and governance, impact assessment and transition planning, contract management and remediation, client and customer outreach and communication, changes to systems and processes, changes to risk and valuation models, and managing related tax and accounting implications.
"We have extensive experience regarding regulatory requirements, having worked on regulatory remediation programmes addressing findings from on-site inspections and insights into the ECB’s supervisory approach and structure."
Please don’t hesitate to contact our experts if you are seeking technical advice regarding legal requirements, supervisory expectations, and insights on optimising processes and controls for topics such as:
Our experts have extensive knowledge and can support you with any questions relating to the ECB’s supervisory approach, including the comprehensive assessment (ie, including asset quality review and European Banking Authority (EBA)/ECB stress tests); and the supervisory review and evaluation process (SREP), featuring supervisory expectations for business model assessment, assessment of governance and risk management processes, and internal capital/liquidity adequacy assessment processes (ICAAP/ILAAP).
An environment of low interest rates, Brexit, cost pressure, regulatory scrutiny and outdated IT infrastructure presents key challenges for the heart of every bank: the treasury. Treasury challenges can be clustered into five main areas:
We know how to set up and define balance sheet management, interest rate risk, liquidity management and liquidity risk management while integrating these into a well-functioning funds transfer pricing structure. All of this enables capital market players to incentivise trading units and other functions in a way that supports and grows the business.
Regulatory compliance is important due to regulatory activity in the past and is still a high priority for regulators, in particular regarding treasury and liquidity (risk) management. Past regulatory activity has revealed new areas of technical and economic scrutiny, especially for sell-side banks operating globally and players active in the high-frequency trading business on their own account, as well as in prime brokerage. Liquidity coverage ratio (LCR) and balance sheet window dressing, net stable funding ratio (NSFR), FTP, stress testing, intraday liquidity, interest rate in the banking book (IRRBB) and structural foreign exchange (FX) positions, among others, are constantly monitored on a standalone basis for each legal entity, which is a game changer. Reporting also requires data of sufficient quality. Ask us how you can ensure regulatory compliance and proper reporting, while keeping operative and portfolio synergies intact to support global models and protect liquidity.
With profitability concerns across the banking industry, treasurers need to focus on their own cost base; but of even greater and increasing importance is the profitability of the bank as a whole. With the treasury being closely connected to a bank’s balance sheet, efficient use of a bank’s resources needs to be ensured to foster better overall business decisions – with the treasury being a strategic partner.
Last but not least, digital transformation and digitalisation are key trends in the industry. Most treasuries are currently working with outdated IT infrastructure and poor-quality data, hampering the decision-making process. The use of new technology is crucial to make the decision-making process more efficient – but also in the drive for better and more sustainable strategic decisions.
"There is uncertainty across the industry on how to act in the current environment and how to align spending across all dimensions. Our treasury experts can help you to navigate this uncertainty, providing guidance on industry trends, technological solutions and regulatory expectations."
The current climate of Brexit, digital disruption and changing regulations demands multi-layered change in businesses. To help you adapt to these new conditions, our Capital Markets team can evaluate the strategic, regulatory and operational readiness of your business with our proprietary Brexit Readiness Maturity Assessment (BreMATM) tool and methodology.
To quickly and efficiently identify gaps in your preparation, we have developed an online self-assessment questionnaire to determine the maturity status of your business activities. The BreMATM tool comes tailored to your organisational setting, and you will be guided on its use by our experts throughout the process.
Should you be interested in using the BREMA tool or methodology, please contact our expert.
The key success factors of our assessment tool are:
Responsibilities are categorised upfront, which enables you to focus your analysis and address key stakeholders within your organisation one by one. Take matters into your own hands and use our assessment tool to gain key insights into your business’ readiness.
Understanding supervisory agendas, regulatory initiatives and keeping up to date with local requirements while also making sure that global business imperatives are considered is becoming increasingly difficult, especially for banks operating globally with their headquarters outside the EU27 or Eurozone. We provide boardroom training and one-on-one coaching on matters such as regulatory initiatives, structural reforms, the EU27, the Eurozone and local national requirements on all aspects of your business.
Additionally, we can offer your board members insights on industry developments, as well as comparisons between the most important regulatory and supervisory regimes – particularly the EU27/Eurozone, the UK and the US.
Partner, PricewaterhouseCoopers Legal AG Rechtsanwaltsgesellschaft, Germany
Tel: +49 69 9585-3189