Basel, the Big Picture: Tackling Risk Aggregation & Reporting. Part 2
“What [should we] look for in a risk aggregation solution?” asked Renzo Traversini, Director of Europe, the Middle East and Africa & Asia-Pacific, Risk Management Center of Excellence at SAS. He was the second of two speakers at a GARP-sponsored webinar to discuss the recently released Basel paper, Principles for Effective Aggregation and Reporting of Risk Data. Traversini focussed on the “nuts and bolts” of how to aggregate and report risk data. SAS is one of the major suppliers of information technology (IT) solutions in financial risk management. Timeliness is crucial to a good reporting system. Traversini began by showing […]
Basel, the Big Picture: Tackling Risk Aggregation & Reporting. Part 1
“It’s a quality piece of work that lays out the road ahead,” said Donna Howe, professor of finance at Brandeis International Business School. She was the first of two speakers at a webinar to discuss the 2013 Basel paper, Principles for Effective Aggregation and Reporting of Risk Data. The webinar was sponsored by the Global Association of Risk Professionals. Besides governance, Howe noted the 14 principles described in the paper expressed four main themes: completeness, accuracy, timeliness, and adaptability. Completeness of risk reporting is necessary, but “it becomes very easy to lose the nuance” when the data are too numerous […]
Exchange-Traded Funds: Beyond Beta?
“An ETF is a structure, not a strategy,” said Som Seif, founder of Claymore Investments, purchased in 2012 by BlackRock. He was addressing an afternoon roundtable on exchange-traded funds at the downtown offices of the CFA Society Toronto on November 28, 2013. ETFs are gaining attention nowadays, he said, because “lower fee investment management is the current trend.” Trained as an engineer, Seif noticed early on in his financial career that “indexing tended to win out,” net of fees. “I don’t believe markets are efficient,” he said, nor does he think that market capitalization is necessarily the best way to […]
Eye on Credit Markets. Part 2: Spreads Hit Floor
“The central bank stimulus has been significant—what will happen as it’s withdrawn?” asked Seth Rooder, Global Credit Derivatives Product Manager at Bloomberg. He was the second of two speakers to consider the effects of tapering in a GARP webinar presentation on November 21, 2013. A key question is: “when will the Fed taper?” Rooder said not soon, because with unemployment still above 6.5 percent, Vice-Chair of the Fed Janet Yellen will have unwillingness to taper. Currently, the Fed is pumping money into the system by buying $40 billion in mortgage-backed securities and $45 billion in Treasury bills per month. He […]
China: Global Leader, Threat, or Both? Part 2.
“The likelihood of conflict is low but non-negligible” when it comes to China’s perspective on Japan’s re-militarization, said Daniel Wagner, CEO of Country Risk Solutions, during the second half of his Global Association of Risk Professionals webinar on October 22, 2013. After surveying Sino-American relations in Part 1, Wagner guided the audience through an in-depth look at China’s evolving geopolitical position in Asia and Africa. Japanese Prime Minister Shinzo Abe has raised military spending, loosened constitutional constraints on military action, and given a high profile to the Senkaku Islands dispute. Sabre-rattling occurs, but Wagner doubts that China and Japan would […]
China: Global Leader, Threat, or Both? Part 1. China and US
“Hide one’s brilliance, bide one’s time” seems the most fitting aphorism for China’s global strategy, said Daniel Wagner, CEO of Country Risk Solutions. During an hour-long webinar on October 22, 2013 organized by the Global Association of Risk Professionals, Wagner guided the audience through China’s evolving geopolitical position generally, as well as its relationships with US, Asia, and Africa. China is in the ascendant mode, said Wagner, citing the increasing use of the yuan as a reserve currency, as well as its rising military power. Regaining global dominance would be “like picking up where they left off,” he said, reminding […]
Credit Workflow Optimization: A Practical Approach
“How can an institution practically approach credit workflow when it might not be streamlined? How can we optimize existing processes?” These questions were posed by Justin Huhn, Credit Assessment & Origination Practice Leader at Moody’s Analytics Enterprise during a webinar arranged by the Global Association of Risk Professionals on September 24, 2013. Huhn noted that, as of Q1 2013, there were over seven thousand insured commercial banks and savings institutions in the US excluding foreign branches. These financial institutions tend to develop silos of expertise. Workflow optimization is of pressing concern to many. In 2008 the American Bankers Association estimated […]
Risk Data Aggregation & Risk Reporting. Part 2
“Not everything that can be counted counts,” said Mike Donovan, VP, Strategic Risk Analytics & Credit Portfolio Management at Canadian Imperial Bank of Commerce (CIBC). He was the second speaker to address the September 19, 2013 evening meeting of the Toronto chapter of GARP regarding the set of Principles for Effective Risk Data Aggregation & Risk Reporting released by the Basel Committee in January 2013. CIBC, like other Canadian banks, is adapting to the heightened risk management data requirements and building the foundation for future sustainable growth. Donovan used the opening quote by Einstein to remind the audience that big […]
Risk Data Aggregation & Risk Reporting. Part 1
During the throes of the last financial crisis, banks and regulators alike “struggled” to get good quality information. “The infrastructure was not there,” said James Dennison, CFA, Managing Director, Operational Risk Division, Office of the Superintendent of Financial Institutions (OSFI). To enhance banks’ risk management infrastructure, the Basel Committee on Banking Supervision (BCBS) released a set of Principles for Effective Risk Data Aggregation & Risk Reporting in January 2013. Dennison was first to speak on the evening of September 19, 2013 at the Toronto chapter meeting of the Global Association of Risk Professionals (GARP). It was convened at First Canadian Place to allow […]
Graph Analytics: A New Approach to Risk Management
According to the World Economic Forum, “personal data is becoming a new economic asset class, a valuable resource for the 21st century that will touch all aspects of society.” The New York Times likens big data to a resource like crude oil. What, then will extract the useful component from the raw data? What reaction vessel will synthesize new things from the raw data? Cray, the supercomputer company, has a spin-off data manipulation company, Yarcdata, that specializes in graph analytics. Graph analytics refers to models of complex networks of data in a graphical representation of nodes and edges. “Analysis of […]