Quality in the time of Covid
There’s a wide range of “quality factor” investing out there. How can the investor distinguish between the variety of methods? More importantly, how can the investor select the best factor method for given economic conditions? To answer this question, a recent paper compared the variety of methods, and examined how each method performed under different market conditions. The paper, “What is Quality?”, by Jason Hsu, Vitali Kalesnik, and Engin Kose, won the Graham & Dodd 2020 award for the best paper published in the Financial Analysts Journal in 2019. To celebrate the achievement, the journal invited the authors of the […]
Private Equity in “the new normal”
From pandemic to protectionism, global events and trends are having an impact on the private equity (PE) markets. From a Canadian perspective, what effect are these issues having on the alignment between PE investors and PE fund managers? In Toronto on July 9, 2020, Helen Pham welcomed three panellists to the webinar titled, “Private Market Trends: Improving Alignment Between Investors and Managers.” The webinar was organized by the institutional asset management committee of the CFA Society Toronto. The panellists shared their thoughts on how investors should view effects of the global pandemic on private equity markets and the associated risks […]
Top 5 Trends in Risk Management
The champagne has been drunk, and the New Year has been rung in. What trends are predicted in risk management as we welcome the new decade? “In 2020, we’ll likely see significant changes in risk models, processes and functions,” predicts Brenda Boultwood, Risk Advisory Partner at Deloitte. As a senior expert in risk culture and corporate governance, she published an article online January 10, 2020, for the Global Association of Risk Professionals (GARP). We present the highlights and a link to the full article below. The three lines of defense business model, as we know it, will end This is actually […]
Machine learning sniffs out corruption
“Bribery and corruption are by-products of risk culture,” said Aparna Gupta, Associate Professor at Lally School of Management at Rensselaer Polytechnic Institute. “We can take a step back and devise methods to detect it using textual data and machine learning.” Gupta was the second of two speakers at the one-hour webinar “Corruption and Corporate Governance” sponsored by the Global Association of Risk Professionals (GARP) on October 30, 2019. Since culture is intangible, empirical work on the relation between risk culture and risk management is limited. Traditional approaches for assessing risk culture have many drawbacks such as bias and lack of comparability. Nonetheless, […]
Earthquakes kill, and so does bribery
“Bribery and corruption are not victimless crimes,” said Hilary Rosenberg, Managing Director and Global Head of Anti-Bribery & Corruption at Standard Chartered Bank. To drive home the point, she showed a brief video in which the pile of rubble from an earthquake is compared to a house collapsing because corruption allowed an unsafe building to be approved. Furthermore, corruption “can hinder economic progress and destroy people’s trust in their government,” Rosenberg said. She was the first of two speakers at the one-hour webinar “Corruption and Corporate Governance” sponsored by the Global Association of Risk Professionals (GARP) on October 30, 2019. Anti-corruption policy […]
A Good Start…
Financial risks due to climate change are receiving more attention of late, particularly for investors and regulators, but how far along are firms in addressing the issues? A report on climate risk management at financial firms tabled on June 28, 2019, sponsored by the Global Association of Risk Professionals (GARP), answers the question with its subtitle: “A Good Start, But More Work to Do.” The report is co-authored by Jo Paisley, Co-President, and Maxine Nelson, Senior Vice President at GARP. “Our sample covered 20 banks and seven other financial institutions … from across the globe. These firms have a global […]
Wanted: Business Expertise
Artificial intelligence can be expensive and tricky to implement. Is it worth the trouble? Two organizations recently decided to pose the question to those who were working in financial institutions. “Due to budget constraints, a company might not always be able to apply artificial intelligence. But, to those who can, the benefits have become clear,” said Mahdi Amri, Partner and National AI Services Leader, Canada at Omnia, which is the artificial intelligence practice at Deloitte. On January 24, 2019, Amri was the second of two panellists who discussed early results of a joint survey by SAS and the Global Association […]
Operationalizing A.I.
How pervasive is the use of artificial intelligence in the field of financial risk management? What are the key challenges in AI implementation over the next two to three years? These issues were examined in early 2019 via the webinar, Operationalizing AI and Risk in Banking, sponsored by the Global Association of Risk Professionals (GARP). “We found exceptionally high rates of AI usage among survey respondents,” said Katherine Taylor, Senior Data Scientist at the software company SAS. On January 24, 2019, Taylor was the first of two panellists who presented a “sneak peek” at a joint survey by SAS and […]
Origins of Canadian Banking
The financial crisis of 2007-2008 triggered a worldwide recession. The American and European banking systems experienced massive losses, takeovers, and taxpayer-funded bailouts. Lehman Brothers, Northern Rock, European debt crisis, … and the after-effects are still being felt. Canada’s banking system did have some shaky moments, as a recently published analysis of its asset-backed commercial paper (ABCP) predicament showed. On the whole, however, Canada’s banks withstood the financial crisis relatively well and the financial system maintained its liquidity, solvency, and profitability. The history of the divergence in the Canadian and American banking systems is recounted in a new book. From […]
8 Ways to Look at Deforestation Risk
“Forests are the lungs of our land, purifying the air,” wrote Franklin D. Roosevelt. Looking at the economic side, what does the loss of forests mean to global markets? “Deforestation is a risk to the supply chain,” said Gabriel Thoumi, Director Capital Markets at Climate Advisers. “It puts billions of dollars at risk.” He was the first of four presenters at the May 4, 2017, webinar sponsored by the Global Association of Risk Professionals. He began with a summary of the activities of Chain Reaction Research, a group which has been actively assessing the sustainability of the supply chains of […]