Bank of Hangzhou has expanded its use of Murex’s MX.3 platform by implementing the Fundamental Review of the Trading Book (FRTB) solution, MX.3 for FRTB, using the standardized approach (SA).
The Bank of Hangzhou initially implemented MX.3 in 2021 to support capital markets activities across asset classes, covering front-office, back-office and risk management functions. The platform has consistently met the bank’s needs for business expansion, risk management and compliance.
Cheng Fan, general manager of Murex Greater China, said in a statement: “The roll-out of MX.3 for FRTB deepens our partnership with the Bank of Hangzhou and reaffirms our commitment to the Chinese market. We prioritize innovation and long-term partnerships.”
After several years of development, Murex debuted its FRTB packaged solution in 2016 to address the new minimum capital requirements for market risk by the Basel Committee on Banking Supervision (BCBS). Based on the BCBS guidelines, the National Financial Regulatory Administration (NFRA) in China adopted these requirements in November 2023 to strengthen banks regulatory standards and risk management practices in the financial sector.
The Bank of Hangzhou prepared for the new capital rules by conducting research as early as 2021. Following a rigorous evaluation in January 2024, the bank selected MX.3 for FRTB to implement the new capital rules using the Standardized Approach (FRTB-SA). MX.3 for FRTB offers a preconfigured setup of FRTB-SA rules across multiple jurisdictions, complemented by customization capabilities to meet specific market needs. The solution fully complies with NFRA’s requirements, including variations from the original BCBS standards. The implementation was completed in eight months.
Apart from increased productivity, the Bank of Hangzhou gained efficiency by eliminating interfaces and reconciliation processes through the seamless integration of the FRTB solution with their existing MX.3 platform, which streamlined model validation and shortened the time required to launch new products.