| Quick to the DowngradeRapid Ratings has set itself apart from the Big Three in the field with an approach that does not require armies of human analysts -- and eschews what its CEO calls "the Corzine effect." |
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| Implied Economic Capital for Counterparty Credit RiskUnder Basel II, financial institutions are expected to calculate economic capital for significant risks. In the case of credit and market risk, there are well-established models, but counterparty credit risk is another matter. |
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| Metarisk: A Novel Risk Management ApproachMetarisk introduces a fourth risk dimension to the credit risk management process -- what will really transpire if and when risk materializes, and what we should do about it now. |
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| Lukken Goes Back To the CapitalThe Futures Industry Association is tapping ex-regulator Walter Lukken, an expert on derivatives markets, risk and regulation, as the replacement for CEO John Damgard. |
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| How the Credit Crisis Has Changed Counterparty Risk ManagementIn the face of dramatically increased capital requirements for counterparty credit risk, banks have created credit value adjustment desks |
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| Chicago HeadwindsCross margining is becoming an ever more important issue for trading firms and the exchanges that rely on their execution volume. |
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| Collateral Management’s Excess Costs, and a Securities Depository SolutionThe financial services could save more than 4 billion euros annually through more efficient collateral management, say Accenture and central securities depository Clearstream. |
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| Complicated CollateralCollateral management is becoming an area of even more intense focus for investment managers as firms come to grips with derivatives regulation and other market-structure changes. |
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| Performance-Based Workout LGDTraditional approaches for quantifying and managing loss-given default are flawed. However, there is an alternative model -- combining LGD quantification with workout process management -- that may offer a solution. |
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| An Option for Credit DefaultThe Chicago Board Options Exchange has re-launched credit default options, but it is taking time for the new listings to gather steam and build liquidity. |
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| The TQM SolutionIrrespective of the recent meltdown and significant losses at banking institutions large and small, progress has been made in credit risk management over the last few decades. Ad hoc and discretionary lending decisions have evolved into more formalized, objective credit evaluation practices. |
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| Kroll Rates BondsBroad-shouldered and smoothly articulate, Jules Kroll exudes a forceful yet understated confidence. Those qualities and the results he delivered propelled the company he started in 1972, Kroll Associates, to international renown in corporate investigations, financial forensics and risk consulting. He is going to need all of his proven managerial skills and instincts to succeed at the next series of challenges he has set for himself. |
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| How the Clearing House RulesAs the collapse of Lehamn Brothers Holdings continues to reverberate in regulatory and policy-making circles two years on, Chris Jones, head of risk management at U.K.-based LCH.Clearnet, has a positive spin on that otherwise sorry and costly story. |
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| In the CrosshairsMost of the victims in the villainous story of the 2008 crash can offer some sort of excuse for their behavior, and even find an occasional defender, but there is one player for whom none of the survivors has a kind word: the ratings agencies. |
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| Centralized Collateral - Not ClearingExisting clearing systems aren't equipped for customized contracts. A collateral-based solution will mitigate the credit risk while monitoring potential systemic weaknesses. Will centralized derivatives clearing solve our bank credit problems? |
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| Credit Where It's OverdueIn December 2007, Moody’s Investors Service predicted that the global default rate, which was at a 26-year low, would surge more than four-fold and reach 4.7% by November 2009. It foresaw the uptrend in counterparty defaults and increased constraints on credit, reducing liquidity in the commodity trading markets. |
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| Did Risk Management Cause the Financial Crisis?Widespread failures of bank risk management have been a defining characteristic of the current financial meltdown. Should we go further, however, and charge the risk management profession with major responsibility for the crisis? |
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