Product Development

Complex trading activities if:
- The market becomes more liquid and sophisticated
- Banks need to trade the portfolio of instruments more than the customer needs
This prompted the bank to expand its trading portfolio. In these circumstances is very important for banks to consider the control structure to ensure that they are able to manage the risks arising from such trading activity.

Because the bank supervisor procedure provides for freedom of new products, it is important to establish a bank banks granting permission procedures are strict in the entire department of the bank. Procedures for granting a permit must include the following:
- Provision granting permission - whether a bank has a license for a product?
- Impact on capital - how these products affect the capital requirements of banks?
- Taxes - the product will create new tax issues?
- Accounting procedures - whether the product can be accommodated by the bank's procedures?
- Legal procedures and documentation - whether the provisions of law have been met and approved the document?
- IT System-does trade and settlement systems need upgrades?
- Operations - whether the bank can booked and conduct accurate transaction settlement?
- Reporting of risk management - whether the system can find the bank's risk and risk positions melaporan generated by the product?
- Pricing and valuation - whether the procedure price and mark-to-market have been approved?
- The need for funding - whether the product a significant impact on bank funding needs?
- Implications for credit risk - whether the bank has sufficient credit lines to support the product?
- Procedure compliance - whether the product requires a new compliance procedures?