Lack of suitable techniques for designing and calibrating models to evaluate alternative scenarios. 3. Large human resources and infrastructure (IT and other) costs of implementing advanced techniques for risk assessment. But improvements in risk management have inherent value to banks by avoiding major costs, including potentially catastrophic costs that can break a bank. Thus they should be pursued with or without regulatory requirements.
Still, the sharper-than-expected decline in oil prices, the decline in long-term bond yields and the further rise in equity prices in recent months are providing some offset to the external drag coming from Asia and the appreciation of the dollar.