Bladewatch.com

http://business.scotsman.com/business/FSA-calls-for–trader.3867110.jp

BRITAIN’S banks have been warned to tighten their financial controls and reform their corporate culture to avoid falling victim to the kind of rogue trading scandal that rocked France’s Société Générale.

In its first newsletter since the Soc Gen announced 4.9 billion of losses in January, the Financial Services Authority (FSA) revealed that its supervisors had held discussions with more than 40 of London’s largest trading banks.

It will be interesting to see what changes this will bring to not only the banks involved, but the trading teams, the back office and IT teams. Let’s not forget to improve compliance and audit controls, you will not only need to ensure that the processes are there, but that they are being enforced, that their is an audit trail, and accountability in those actions.

Related to that is the importance of those systems which log the transactions, those applications that calculate your risk, as well as the IT systems used to underpin these services. As we move to a more compliant and audited way of doing business - how do we deal with the issue of admin rights – who has access to what elements of the system – do application teams? How do we assign or acknowledge risk both in terms of security and compliance. You might have a wonderfully restricted and industrial strength IT solution, but that’s of marginal benefit if your ability to restore data, to recover those transaction logs can’t meet the users or the regulators’ requirements. “Sorry, the backup worked, but the data recovery did not.”

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