Can FTP Rule or FTP Adjustment Rules With Conditional Assumption be Used in BSP? (Doc ID 2264490.1)

Last updated on MAY 10, 2017

Applies to:

Oracle Financial Services Balance Sheet Planning - Version 8.0.0 and later
Information in this document applies to any platform.
Oracle Financial Services Balance Sheet Planning (BSP)

Goal

On BSP 8.0.2.0.5 can you use an FTP Rule or FTP adjustment RULE with Conditional assumption in BSP?
Currently using BSP integrated with OFSAA FTP & ALM, when trying to use FTP ADJUSTMENT RULE containing conditional assumptions (defined from OFSAA screen), the conditional assumptions is not visible in the BSP screen.
If running calculate, will the FTP rule use the conditional assumption or NOT ?

Note:-The requirement that for the same COA could have two adjustment rates based on the customer segment (Custom1 dimension in BSP), so there is need to use conditional assumption as in FTP/ALM modules.

The requirements are:

- Liquidity buffer spread – A manual percentage would be provided by BSM and this would be basis of applying the same in the FTP charge.
 It’s Standard Functionality in BSP to configure multiple FTP Adjustment (Spread) on product(COA) level, BSM can provide percentages will be used to calculate.

- Expected loss– In case of Corporate Banking, expected loss % is specific to a product and customer segment. The expected loss % will be provided for the following:
o Customer segment
o Product
o ORR weighting
o Maturity term (tenor)

- Application of the expected loss for corporate banking & treasury:
While planning the new book, the planner will have to provide the average ORR weighting for the loan book and based on the cash flow duration, the respective expected loss % will be applied. Though the ratings are available at customer level however the budgeting will be done at Product and Segment level for the existing and new business.
As the bank does not have modeled the expected loss % for Retail Banking, thus the percentages will be provided by the Retail Banking team at a product level. However, this will be decided by the bank at a later stage.

Cost of capital – In case of Corporate Banking, cost of capital is specific to a customer segment. The same % can be applied to all the products within a customer segment. The cost of capital % will be provided for the following:
o Customer segment
o ORR weighting
o Maturity term (tenor)

Now for the liquidity Buffer spread I can model it in FTP adjustment Rule as it's only by product,
what is the best approach to model the Cost of capital & Expected loss as mentioned in the requirements it's different by Customer Segment.

In our case is the FTP adjustment is the correct place to calculate them if not what is the alternate solution ?

Solution

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