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Making strides in financial services risk management - Capital management - EY - Global

Making strides in financial services risk management

Capital management

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“There is a widening gap between our economic capital model and the regulatory capital requirement. We have to avoid large amounts of unallocated capital at the top of the house.” – Survey respondent

Stricter regulations are driving banks to rebalance portfolios, rethink market strategies, and raise capital levels and ratios.

For example, as part of re-evaluating their portfolios, banks are exiting more capital-intensive, less-profitable lines of business and geographies. They are also shifting out of more complex, less-liquid instruments into simpler, more-liquid products with less risk.

Top challenges cited include regulatory uncertainty, methodology and culture.

Organizations reported that it is a difficult process to develop the right methodologies to strategically evaluate the portfolio to support business decisions; to allocate and manage capital across business; and to monitor and measure process.

Adjustments to capital across units


Capital management changes


Legal entities




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