Author(s)

John Peter Koeplin¹, Pascal Lélé^1,2

¹School of Management, University of San Francisco, San Francisco, USA.
²HCM Accounting Academy, Innovation Hub of LELE-HCM Accounting Industry Inc., Atlanta, USA.

Hedge accounting reporting is no longer optional since January 1, 2023, with the entry into force of the Revised Basel Framework. This paper contributes to the practice of TPRM on corporate accounting interaction FinTech highlighted by the FED Interagency Letter SR 23-4, to cross the critical milestone of Template CR3 prescribed since 2019. This is the standardized approach articulating the OPE25-Calculation of RWA for operational risk with CRE22-Calculation of RWA for credit risk for recognition of credit risk mitigation based on monitoring and control of earnings resulting in deposit accounts of Template CR3: Mandatory Credit Risk Mitigation Techniques for all banks and financial services. The CR3 template covers all CRM techniques recognized in the applicable accounting framework. It is part of corporate accounting (management accounting or cost accounting). “The mapping process used must be clearly documented. Written business line definitions must be clear and detailed enough to allow THIRD PARTIES to REPLICATE the business line mapping. The Basel Committee on Banking Supervision (2019) requires that documentation must, among other things, clearly motivate any exceptions or overrides and be kept on record”. The technical issue is therefore the accounting document of costs and benefits to be attached to the Deposit Accounts Agreement for TPRM.

Hedge Accounting for TPRM, Operational Risk Impact on Credit Risk, FinTech Supporting Sound Practices, CRE 22 Disclosure Requirements, Loss Mitigation Accounts

Koeplin, J. and Lélé, P. (2024) Up-to-Date Hedge Accounting for TPRM Based on Cost/Benefit Assessment When Aligning with FED Interagency Letter SR 23-4 to Be Shared for FinTech Supporting Sound Practices within CRE 22 Effective as of: 01 Jan 2023. Journal of Financial Risk Management, 13, 207-259. doi: 10.4236/jfrm.2024.131011.