Analytic Risk Trechnology has developed CUBITT a capital modelling tool to give banks the ability to model the effects of many scenarios for multiple regulators, and internally for management reports and ICAAP. This capability is particularly relevant with the introduction of the BES ( The Bank of England’s Biennial Exploratory Scenario ) this year. The requirements are becoming more analysis focused and this is where CUBITT can really help.
Producing the stressed projections and the regulatory submissions involves pulling together risk and finance data in ways existing reporting systems are not designed to handle. CUBITT is a purpose built tool to help stress testing capital analysts to produce insight instead of struggling with data sourcing.
CUBITT’s ability to show the impact on the key capital and leverage ratios, of accepting or rejecting the different actions in the capital plan, will give management real insight into the scenarios. This is particularly relevant in the presence of questions over AT1 instrument behaviour (CoCo conversion ). Understanding exactly what combinations of scenarios and management actions would cause triggers to be reached is a valuable outcome of stress testing analysis, and increasingly demanded by regulators.
CEO Tim Murnaghan says: “I built CUBITT in modern technology which makes it easy to deploy, manage and control and what makes CUBITT really exciting for the users is that it gives the ability for banks to build on top of their existing modelling efforts. I have seen many firms submissions and know exactly where they are struggling with data. There is an obvious benefit in CUBITT in having a tool pre configured with regulators’ data definition.”