What is simulation in SAP FS-BA - Bank Analyzer?

SAP Term: simulation

• Component: FS-BA

• Component Name: Bank Analyzer

• Description: Execution of a calculation run with real or simulated risk parameters where the results are not used for the calculation of the actual capital requirement. &EXAMPLE& A bank uses the IRB approach to value its corporates, banks, and retail portfolios. It uses the standardized approach for all other portfolios. The bank has already set up an internal rating method for sovereigns but this method has not yet been integrated into the bank's processes or approved by the regulatory bodies. Beforehand, the IRB approach is to be used to calculate or simulate the capital requirement of the portfolio for sovereigns.

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• Key Concepts: 
  Simulation in FS-BA Bank Analyzer is a tool that allows users to simulate the effects of different scenarios on their banking operations. It enables users to analyze the impact of changes in their banking environment, such as changes in interest rates, customer behavior, and market conditions. The simulation tool can be used to identify potential risks and opportunities, and to develop strategies for managing them. 
  
  How to use it: 
  To use the simulation tool in FS-BA Bank Analyzer, users must first define the parameters of the simulation. This includes setting up the initial conditions, such as the starting balance sheet and income statement, as well as defining the variables that will be used in the simulation. Once these parameters are set, users can then run the simulation and view the results. The results can be used to identify potential risks and opportunities, and to develop strategies for managing them. 
  
  Tips & Tricks: 
  When using the simulation tool in FS-BA Bank Analyzer, it is important to ensure that all of the parameters are set correctly. This includes setting up the initial conditions accurately, as well as ensuring that all of the variables used in the simulation are correctly defined. Additionally, it is important to run multiple simulations with different parameters to ensure that all potential risks and opportunities are identified. 
  
  Related Information: 
  For more information on using the simulation tool in FS-BA Bank Analyzer, please refer to SAP’s official documentation on the topic. Additionally, there are a number of online resources available that provide tutorials and tips for using this tool effectively.