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Since the early 1990s, balanced funds – holding 60% of assets in stocks, 40% in bonds – have been a go-to strategy for institutional and individual investors alike. It is based on a popular...
December 6, 2024 | By Michael Shari
When the U.S. Securities and Exchange Commission reversed course and approved the listing and trading of bitcoin exchange-traded products (ETPs), it was following a court ruling by taking what Chair...
November 22, 2024 | By John Hintze
Both financial institutions and their regulators must deal with risk concentrations. They come in two types: observable and hidden. Alla Gil To manage these concentrations, banks set risk limits on...
November 8, 2024 | By Alla Gil
Target date funds are designed to mitigate risks long-term by gradually selling equities and buying bonds, moving from relatively volatile toward more conservative assets as the investor approaches...
November 1, 2024 | By Michael Shari
The United Kingdom and European Union are trying to catch up with the U.S. in building their respective consolidated market tapes, known in the U.S. as the Consolidated Audit Trail (CAT). The U.S....
October 25, 2024 | By Kelvin To
To address mutual funds’ liquidity management under stressed conditions, the U.S. Securities and Exchange Commission proposed a package of regulatory amendments titled “Open-End Fund Liquidity Risk...
October 18, 2024 | By John Hintze
Institutional investors who are wading, however cautiously, into crypto assets bring familiar tools such as Value-at-Risk (VaR) into uncharted waters. How does VaR, time-tested but not necessarily...
October 18, 2024 | By Anisha Sircar
Now that the Federal Reserve has started cutting interest rates, the shape of the yield curve is going to change – and cash management strategies must be reviewed. Cash management is a critical task...
October 4, 2024 | By Alla Gil
A half-century ago, I worked while in college for a man named Arthur Bryson, who was a pioneer in the field of optimal control. The project was to extract information from multiple navigation aids to...
September 27, 2024 | By Aaron Brown
Over half a century has passed since electronic communication networks (ECNs) disrupted the traditional floor-based model of stock exchanges and ushered in the era of electronic trading. Since...
September 27, 2024 | By Kelvin To
While waves of technological innovation swept through one capital-market segment after another over the last quarter century, trading of syndicated loans remained mired in manual inefficiencies and...
September 20, 2024 | By John Hintze
Liquidity risk management for risk practitioners remains one of the most difficult areas in asset-liability management, complicated by limited data on how certain types of depositors respond to bank...
September 20, 2024 | By Clifford Rossi
Should a company's CEO publicly take a stand on political issues? It might be wise for the executive management team to stick to topics related to their business and avoid political statements...
September 6, 2024 | By Cristian deRitis
Registered index-linked annuities (RILAs) offer a balance of growth potential and downside protection. But while they have gained popularity as retirement and investment products, they also present...
August 30, 2024 | By Alla Gil
Intercontinental Exchange – an operator of clearing platforms alongside a global array of equity, energy and commodity markets and data, fixed-income and mortgage technology businesses – is moving in...
August 23, 2024 | By John Hintze
Pressing ahead with rulemakings rooted in the post-financial crisis Dodd-Frank Act, the Securities and Exchange Commission on a single day last October approved separate sets of requirements for...
July 12, 2024 | By John Hintze
Adopted last December by the Securities and Exchange Commission, with phase-in milestones through June 2026, rules requiring central clearing for much of the U.S. Treasury securities market “will...
June 28, 2024 | By John Hintze
Regulators monitoring financial-stability risks are about to get a clearer view into a crucial but historically opaque segment of the U.S. repurchase-agreement, or repo, market. A final rule from the...
June 14, 2024 | By John Hintze
The regional bank crisis in the U.S. is far from being over. Last month, Republic First Bank was seized by Pennsylvania regulators, and Federal Reserve Chair Jerome Powell expects to see more banks...
May 24, 2024 | By Alla Gil
Inflation is a critical challenge that demands the attention of risk managers. It is a focal point for central bankers, businesses and households, and the impact inflation can have on businesses and...
May 2, 2024 | By Cristian deRitis
Investing in dividend-paying stocks has long served as a strategy to mitigate equity-market risks. The quarterly payouts can be an indicator of corporate performance and cushion stock-price declines....
April 12, 2024 | By Michael Shari
During a particularly active period of securities market rulemakings, financial industry reactions to new regulatory proposals often boil down to “too much, too soon.” The U.S. Securities and...
April 5, 2024 | By John Hintze
In a report last November, the Alternative Reference Rates Committee declared success as it closed the book on supplanting the Libor benchmark in the U.S. with the Secured Overnight Financing Rate...
March 28, 2024 | By John Hintze
On March 5, nearly a year after the collapse of Silicon Valley Bank, the credit-risk-challenged New York Community Bancorp was causing jitters locally and in financial markets. Deposits had fallen...
March 15, 2024 | By Jeffrey Kutler
While we often think of concentration risk in the context of managing credit or investment portfolios, it turns out this risk is ubiquitous across a bank’s risk taxonomy. It has over the years been a...
March 15, 2024 | By Clifford Rossi
Record catastrophe (cat) bond volume in 2023 stemmed largely from inflation. Although that factor may be moderating, a first-time cyber cat bond early last year gave way to an unexpected rush toward...
March 8, 2024 | By John Hintze
In the 1980s, men being treated for AIDS began defraying hospital expenses by selling their life insurance policies for less than the death benefit. The practice became known as life settlement. By...
February 9, 2024 | By Michael Shari
Imagine the following scenario. Militaries are facing off with increasing aggression in Europe and Asia. Nationalistic sentiments are taking root across the globe, while tensions over the control of...
February 9, 2024 | By Clifford Rossi
In the week following the U.S. Securities and Exchange Commission’s January 10 vote to authorize 11 spot bitcoin exchange-traded funds, bitcoin funds led by BlackRock and Fidelity enjoyed upwards of...
January 26, 2024 | By John Hintze
Starting with the pandemic and running through last year’s regional banking crisis in the U.S., a series of extreme, highly unpredictable events placed the spotlight on risk management...
January 19, 2024 | By Alla Gil
At the most recent Federal Reserve Bank of New York Treasury Market Conference, an annual check-in on risks and resilience in “the deepest and most liquid government securities market in the world,”...
January 12, 2024 | By John Hintze
The start of a new year is a time of personal reflection and goal setting for many. For financial institutions and their risk managers, the turn of the annual calendar represents an opportunity to...
January 12, 2024 | By Clifford Rossi
Which specific risks should financial risk managers keep a particularly close eye on this year, and what steps can financial institutions take to mitigate these threats? My son’s recent ice-skating...
January 5, 2024 | By Cristian deRitis
The future of EquiLend, a trading platform that has been at the heart of the securities lending market for more than 20 years, is being reassessed amid other anticipated changes in securities-finance...
December 22, 2023 | By John Hinte
Geopolitical risks are broad, complex and hard to predict. Just consider, for example, the ramifications of the ongoing Russia/Ukraine military conflict in Ukraine, which has increased tensions...
December 1, 2023 | By Cristian deRitis
From the point of view of an investment firm that has taken into consideration environmental, social and governance factors for over a decade – with close attention being paid since our founding in...
November 3, 2023 | By Sharon Bentley-Hamlyn
Despite worries late last year that Hurricane Ian would cause significant losses in the insurance-linked securities market, new-issue ILS – primarily catastrophe (cat) bonds – set a new record in the...
October 20, 2023 | By John Hintze
An extended period of economic and political uncertainty has not dampened investment managers’ emerging-market convictions. While global debt levels and the struggles of low-income countries,...
October 20, 2023 | By Dawn Kissi
Over a quarter century, the Global Investment Performance Standards (GIPS) have settled in as a best-practice benchmark for investment firms’ performance calculations and presentations, yielding...
September 29, 2023 | By Michael Shashoua
How helpful are existing models in identifying and preempting hidden risks? That’s an important question that has arisen in the aftermath of a stream of unexpected risk shocks over the past few...
September 29, 2023 | By Alla Gil
How prepared are commercial banks for the risks stemming from nonbank financial institutions (NBFIs), and does the ascension of these firms provide opportunities for aspiring and early-career risk...
September 15, 2023 | By Tod Ginnis
The formal cessation of the Libor benchmark at the end of June was long anticipated by, among others, the American Financial Exchange (AFX), the platform on which funding transactions among its...
September 15, 2023 | By John Hintze
The recent and rapid confluence of tail-risk events – from the deadly global pandemic to Russia’s invasion of Ukraine to the subsequent supply-chain disruptions and inflation spike – has triggered...
August 25, 2023 | By Tony Hughes
Inflation has put the profitability of both life and non-life insurers under strain. In light of the risk of sustained inflation, the U.K. Prudential Regulation Authority (PRA) has urged insurers to...
August 11, 2023 | By Sander Dekker
Inflation, geopolitical risk, and escalating interest rates and energy prices were among the factors that were expected to send the global economy spiraling in 2023. But a funny thing has happened...
July 7, 2023 | By Cristian deRitis
The failures of regional banks earlier this year brought renewed attention to held-to-maturity (HTM) assets and to arguments to eliminate the classification in favor of fair value accounting. In an...
July 7, 2023 | By John Hintze
A critical uncertainty hanging over cryptocurrencies is whether they are to be regulated as securities or commodities. Another, more traditional asset class is undergoing a legal test of its own: Are...
June 30, 2023 | By John Hintze
Having lived through a financial crisis in the late 2000s and a global pandemic in the early 2020s, and with the threat of global warming and cybercrime ever present, risk managers might be excused...
June 23, 2023 | By Tony Hughes
Approaching a decade since Wall Street institutions began exploring blockchain, or distributed ledger technology (DLT), to replace legacy processing infrastructures, tangible progress remains spotty....
June 2, 2023 | By John Hintze
As the manager of a European fund that endeavors to invest in companies with strong ESG credentials, I find it increasingly dispiriting to witness the discrediting of this style of investing....
May 19, 2023 | By Sharon Bentley-Hamlyn
We have all been trained to regard return volatility as the main measure of portfolio risk. Relying on well-established multi-factor risk models, VaR models, credit default models and their own...
May 12, 2023 | By Michelle Teng
The basic business of a bank is to take deposits and make loans, an intermediary function governed by asset and liability management (ALM). The depositor runs that brought down Silicon Valley Bank...
May 12, 2023 | By John Hintze
As it's currently constructed, the volatile U.S. housing finance system is dominated by a pair of government-sponsored enterprises (GSEs) and is vulnerable to systemic risk. The problem, in short, is...
April 6, 2023 | By Clifford Rossi
Securities and Exchange Commission Chair Gary Gensler’s regulatory activism has set off debates between rival political factions, but on one matter they may find common cause: the slump in public...
April 6, 2023 | By John Hintze
It’s now crystal clear that leadership at financial institutions can’t ignore risk and governance issues. That notion was reinforced by the risk management failures that led to the collapse of...
March 31, 2023 | By Tod Ginnis
In a 2019 letter to their top federal regulators, executives representing Fifth Third Bancorp, PNC Financial Services Group, Regions Financial Corp. and other big regional banking companies warned...
March 24, 2023 | By John Hintze
The sudden collapse of Silicon Valley Bank (SVB), the second largest bank failure in U.S. history, has been subject to an avalanche of media scrutiny. But there is one key question that has yet to be...
March 24, 2023 | By Chris Donohue, Bryan Feierstein and Eli Crane
Less than a month before its historic collapse, Silicon Valley Bank (SVB) was named one of America’s best banks by Forbes. It just shows how quickly financial markets can change, particularly when...
March 17, 2023 | By Alla Gil
As someone who had a front-row seat at the largest bank failure in U.S. history, Washington Mutual, the demise of Silicon Valley Bank (SVB) brings back memories of how seemingly well-run banks can in...
March 14, 2023 | By Clifford Rossi
Two auto loan securitizations late last year tested an officially recommended boundary to use of the term version of the secured overnight financing rate (SOFR), a replacement for the floating-rate...
March 3, 2023 | By John Hintze
During economic crises, liquidity risk can spread throughout the financial system, leading to credit crunches and severe downturns. Banks must therefore that have adequate liquidity and funding to...
February 24, 2023 | By Alla Gil
Almost three years since widespread selling of U.S. Treasury bonds exposed weaknesses in that essential market’s operational resilience and prompted an unprecedented Federal Reserve response to...
February 10, 2023 | By John Hintze
Market-shifting crises can break out at any unpredictable moment, but stocks trade in fixed hours. In the U.S., stock exchanges open at 9:30 am and close at 4:00 pm. Although pre-session trading...
February 3, 2023 | By Michael Shari
Federal Reserve aggregate reserve balances fell from a record high in late 2021 and may hit levels this year that increase the likelihood of interest rate spikes and necessitate central bank...
January 13, 2023 | By John Hintze
Technology has been progressively improving financial market operations for decades. The kinds of platforms that have streamlined trading in public equities and other liquid asset classes are now...
January 6, 2023 | By John Hintze
As global economies confront multiple threats, ranging from inflation and rising energy prices to armed conflict and natural disasters, 2023 is shaping up to be a challenging year. While accurately...
January 6, 2023 | By Cristian deRitis
The U.K. pension fund crisis raised significant concerns about the liquidity risk management strategies currently being employed by buy-side institutions. Specifically, it called into question...
December 9, 2022 | By Alla Gil
European Union capital rules, to be implemented starting in 2025, are expected to dramatically increase bank capital requirements for securities lending and institutional-investor counterparties’...
November 23, 2022 | By John Hintze
The threat of stagflation is now causing headaches for financial risk managers. This rare confluence of abnormally high inflation and stagnant growth hasn’t been seen in the U.S. since the oil crisis...
November 18, 2022 | By Tod Ginnis
Market participants still holding U.S. dollar Libor-based financial products have until June 30, 2023, to transition them to a replacement benchmark rate, and this year’s interest rate volatility has...
November 11, 2022 | By John Hintze
The failure to adequately model interrelations between capital and liquidity needs could lead to a dramatic underestimation of an institution’s vulnerability. This is particularly true in the current...
October 21, 2022 | By Alla Gil
From interest and exchange rates to rising inflation and fears of recession, the International Monetary Fund’s latest World Economic Outlook delineates all-too-familiar pain points for households,...
October 21, 2022 | By Jeffrey Kutler
The general prognosis for the overall economy in the U.S. and abroad doesn’t look bright, with increasing inflation, soaring interest rates, and massive volatility in financial markets. One exception...
October 7, 2022 | By Clifford Rossi
Fueled by widespread economic volatility, geopolitical uncertainty, and an increasingly hawkish Fed in the face of inflation, the U.S. dollar has been at its highest levels in 20 years. After...
September 30, 2022 | By Kevin Jones
With $3.1 billion in assets under management, accounting for about half of the AUM of Bellingham, Washington-based Saturna Capital Corp., the Amana Growth Fund is among the biggest U.S. mutual funds...
September 23, 2022 | By Michael Shari
September 1 was the deadline for the sixth and final group of financial firms to be in compliance with initial margin (IM) requirements for over-the-counter derivatives. But an issue raised by the...
September 16, 2022 | By John Hintze
Risk managers grappling with multiple extreme events over the past couple of years must feel a bit like Dorothy and her Wizard of Oz associates, chanting a chorus of “Lions and Tigers and Bears, Oh...
September 16, 2022 | By Clifford Rossi
Crypto investment funds reportedly boast a staggering $30.2 billion in total assets under management (AUM), including $19.3 billion worth of Bitcoin and $7 billion in Ethereum. While the fund manager...
September 2, 2022 | By Devon Drew
Even before the Russian invasion of Ukraine, country risk was already a top concern facing manufacturers, retailers and financial institutions. Estimating this risk, however, entails far more than...
September 2, 2022 | By Cristian deRitis and Eric Gaus
Syndicated loans and collateralized loan obligations (CLOs) – high-volume markets largely bypassed by trading innovations that have modernized one historically offline asset class after another – are...
August 26, 2022 | By John Hintze
War in Ukraine means hunger in Africa. That assertion, by International Monetary Fund Managing Director Kristalina Georgieva, expressed in a nutshell the reality of globally interconnected risks....
August 5, 2022 | By Dawn Kissi
For many high-growth companies, the top priority is building the business and demonstrating top-line revenue growth. As they progress, the focus often shifts to the bottom line, which includes...
July 29, 2022 | By Jason Peterson
The typical advice from wealth managers or financial planners during a downturn is, “Don’t worry, the markets will recover, and we have a long-term strategy.” That is true: they will recover...
July 29, 2022 | By Alla Gil
Although cryptocurrency values have crashed, it is not just true-believing bitcoin maximalists who are keeping faith in the asset class. Investment advisers are recommending modest portfolio...
July 22, 2022 | By Jeffrey Kutler
Corporate and institutional investors in prime and tax-exempt money market funds may have to look for alternative cash management tools if the Securities and Exchange Commission rejects industry...
July 8, 2022 | By John Hintze
As volatility roils the commodity markets, corporations face difficult decisions in managing financial risk. For many, achieving long-term success requires dispelling misconceptions and facing...
July 1, 2022 | By Bryant Lee
Cash is king. This may be a cliché, but it also happens to be true. If your balance sheet is bulging with greenbacks, it’s almost impossible to default. By contrast, you can have capital buffers in...
June 24, 2022 | By Alla Gil
All across the industry, it seems, people have a penchant for “forward-looking” models. They are sick of crude “backward-looking” tools, and are instead keen to use “modeled” rather than “historical”...
June 24, 2022 | By Tony Hughes
There is no summer respite for risk managers at asset management firms as they work toward an August 19 deadline to comply with Securities and Exchange Commission Rule 18f-4, which requires them to...
June 17, 2022 | By Michael Shari
Latin America’s distance from the Russia-Ukraine war blunts some of the economic spillovers buffeting those closer to the conflict. But for Brazil, with the approach of national elections in October,...
June 3, 2022 | By Dawn Kissi
If the wind changes, you’ll stay like that! When I was a tot, I’d make silly faces, and my parents sometimes tried to persuade me to stop by teasing that my face would remain in an unflattering...
May 27, 2022 | By Alla Gil
For better or worse – and understandably in view of its most recent downturn – the cryptocurrency market attracts outsize public, media and, increasingly, regulatory attention. Although relatively...
May 27, 2022 | By Jeffrey Kutler
The Securities and Exchange Commission has picked up its pace of proposed rulemaking – “too much, too quickly,” Securities Industry and Financial Markets Association chief Kenneth Bentsen has...
May 20, 2022 | By John Hintze
Emerging market economies, hit disproportionately hard by the pandemic and related shocks, are yet again reeling from inflation and other economic effects of the Russia-Ukraine war. That is the...
April 29, 2022 | By Dawn Kissi
The insurance-linked securities (ILS) market reached record volume last year and is primed to grow dramatically as insurers look to the capital markets to help cover ballooning cyber-related risks....
April 22, 2022 | By John Hintze
Credit risk and interest rate risk are often perceived by banks as worlds apart, thanks in part to the well-established risk taxonomy of the Basel Committee on Banking Supervision (BCBS). However, in...
April 8, 2022 | By Marco Folpmers
In January 2021, Mark Makepeace came out of a short-lived retirement from London Stock Exchange Group’s FTSE Russell to become CEO of Wilshire. He immediately got into educating pension funds, asset...
March 18, 2022 | By Michael Shari
Across financial markets, the confrontation over Ukraine generated that least welcome of investment factors: uncertainty. Volatility ran high as investors pondered various military-intervention...
February 25, 2022 | By Dawn Kissi
Long-term investors typically use strategic asset allocation (SAA) to help them determine how to split investments among different asset classes. But traditional SAA often fails to consider both...
February 18, 2022 | By Alla Gil
Over the past decade, the securities trading industry has responded to economic and operational crises with a series of circuit breakers, limits and risk controls, implemented one at a time. The...
January 21, 2022 | By Michele Hillery
From fine art to cryptocurrencies, alternative investments are all the rage these days. Asset managers, insurance companies and pension funds are looking to alternative investments to boost returns,...
January 21, 2022 | By Alla Gil
Ever since Harry Markowitz introduced Modern Portfolio Theory (MPT) in “Portfolio Selection,” a 1952 Journal of Finance article, institutional investors have applied it to spread their risk across...
January 21, 2022 | By Michael Shari
From real estate debt to regulatory crackdowns to geopolitical tensions, China gives investors, risk managers and corporate strategists more than a few reasons to prepare for adverse outcomes or...
January 14, 2022 | By Dawn Kissi
Starting this month, Clifford Rossi - a former banking CRO and a current professor at the University of Maryland's Robert H. Smith School of Business - will be taking over as our CRO Outlook...
January 7, 2022 | By Clifford Rossi
Supply-chain failures, and their knock-on effect on inflation, have risen to the top of the list of economic concerns for both households and businesses. Their fears are well-grounded. As the world...
December 3, 2021 | By Cristian deRitis
Organizations across the U.S. continue to transfer billions of dollars of defined benefit (DB) pension plan liabilities to insurance companies. These so-called pension risk transfers could easily...
November 24, 2021 | By Tom Sablak
Fears of inflation have been rising. Indeed, persistent inflation and monetary tightening is now the most cited potential market shock, according to the Federal’s Reserve’s most recent financial...
November 19, 2021 | By Alla Gil
With a muted long-term growth outlook, and state-owned petroleum company Pemex negatively impacting public finances, Mexico could be facing a downgrade, with governance indicators also playing a...
November 19, 2021 | By Dawn Kissi
Crises always reveal the true value of an adaptable, integrated approach to risk management. COVID-19 is no exception. Indeed, throughout the current pandemic, financial services firms have realized...
November 12, 2021 | By Brenda Boultwood
In the U.S., consumers and borrowers are standing at the precipice of the biggest upheaval in the world of interest rates since the 2008 financial crisis. Surprisingly, they are largely unaware that...
October 29, 2021 | By Jonathan Rosen
In establishing its risk framework, it is likely your organization started with a language of risk. Aligned with each risk in this taxonomy is one or more key risk indicators (KRIs). But what,...
October 22, 2021 | By Brenda Boultwood
For corporate finance, a lesson from the pandemic period is to be more proactive in managing financial risk and thereby accelerate efforts to deal with longstanding challenges. After COVID-19 struck...
October 8, 2021 | By John Hintze
From Lebanon to Tunisia, from Ethiopia to Syria to Myanmar, political and humanitarian crises are flaring up worldwide, destabilizing economies amid a backdrop of social unrest and vaccination...
October 1, 2021 | By Dawn Kissi
U.S. home prices rose by 19% over the prior year in June 2021, the fastest pace of growth in 45 years. Price increases in certain states and metropolitan areas have been even more eyepopping, with...
October 1, 2021 | By Cristian deRitis
The board of directors always prefer a simple, concise summary of the organization's top risks over a voluminous risk report. Firms often use a risk heatmap to scrutinize the completeness and...
September 17, 2021 | By Brenda Boultwood
Securities financing, used by institutional investors to generate returns on assets and hedge price volatility, is becoming increasingly popular among cryptocurrency holders. Evidence of the...
September 3, 2021 | By John Hintze
As high-net-worth investors, family offices and other professional and institutional investors diversify into cryptocurrency and other digital assets, a question arises about readiness: Have...
August 27, 2021 | By Michael Shari
Financial institutions rely on asset and liability management (ALM) to mitigate the risks associated with mismatched assets and liabilities. However, traditional ALM frameworks are narrowly focused,...
August 26, 2021 | By Alla Gil
The Alternative Reference Rates Committee (ARRC) has recommended a term version of the Secured Overnight Financing Rate (SOFR) for business loans and related transactions, after indicating previously...
August 6, 2021 | By John Hintze
Forecasting 6% global growth for this year, the International Monetary Fund says, “We are seeing in some countries a recovery like no other, propelled by a combination of strong fiscal and monetary...
July 23, 2021 | By Dawn Kissi
Post mortems on the COVID-19 crisis, from a financial market perspective, home in on emergency interventions by the Federal Reserve and ensuing dysfunctions in U.S. Treasuries. There is no disputing...
July 23, 2021 | By John Hintze
The Commodity Futures Trading Commission and Securities and Exchange Commission have filed civil charges relating to losses incurred by the Chicago-based LJM fund complex amid the “volmageddon”...
June 11, 2021 | By Jeffrey Kutler
Early this year, market participants were worried about the lack of a Libor-replacement rate with a term structure similar to Libor's. Now it is a case of which one to choose. Although the Federal...
June 4, 2021 | By John Hintze
Rules stemming from the Basel Committee on Banking Supervision's Fundamental Review of the Trading Book (FRTB) market risk guidelines, initiated more than a decade ago, become effective in Europe...
May 14, 2021 | By John Hintze
For Donald MacKenzie, individuals' interactions with machines, mathematics and technology in competitive settings - and the risks that may ensue - are subjects of great fascination, whether in...
May 7, 2021 | By Katherine Heires
The ongoing bull market in equities has played a major role in depressing securities-finance revenue in recent years. Reddit “meme stock” traders fueled a temporary bump up in revenue early this...
May 7, 2021 | By John Hintze
My 4-year-old son learned to ride a bicycle recently. This was not only a great accomplishment but also provides a perfect metaphor for risk professionals, especially now as we turn our attention to...
May 7, 2021 | By Cristian deRitis
Collateralized loan obligations (CLOs) pool highly complex and bespoke syndicated loans into securities sold to investors with varying priorities. In the transition away from Libor, the predominant...
April 1, 2021 | By John Hintze
When bitcoin climbed past $50,000 in mid-February, the digital-asset buzz was less about a new price spike than about the mainstreaming of cryptocurrencies and the institutionalization of the asset...
February 26, 2021 | By John Hintze
Citi's decision to join the American Financial Exchange (AFX) and make markets in Ameribor-based derivatives brought the upstart exchange long-sought affirmation from a major Wall Street player. More...
February 12, 2021 | By John Hintze
The COVID pandemic has caused a crueler drop in sales of fixed index annuities (FIAs) than insurers have seen since the Great Recession, creating a new opportunity for inventive managers of...
December 11, 2020 | By Michael Shari
Market participants have never underestimated the difficulties of transitioning away from the Libor (London interbank offered rate) by the end of 2021, but as the countdown continues, the magnitude...
December 4, 2020 | By John Hintze
Tests conducted by researchers at the Durham University Business School, in collaboration with the Risk Accounting Standards Board (RASB) found that exposures to the operational risks of U.S. banks...
December 4, 2020 | By Peter Hughes
Despite 20 years of endeavor, it's thumbs down for banks' approach to operational risk management (ORM). The Basel Committee on Banking Supervision has abandoned the banks' flagship advanced...
October 16, 2020 | By Peter Hughes
While heeding regulators' insistence that they move away from the London Interbank Offered Rate (Libor) benchmark by the end of 2021, U.S. banks are facing the fact that the Federal Reserve-supported...
September 25, 2020 | By John Hintze
The pandemic has produced unprecedented shocks that have hurled financial institutions' risk limits into chaos in a short period of time. Consequently, significant revisions to the standard risk...
September 11, 2020 | By Alla Gil
During a four-week stretch in February and March, the combination of pandemic, politics and related economic fallout caused the Cboe Volatility Index (VIX) to spike by a historic 475%, from 14.38 to...
September 4, 2020 | By Michael Shari
Legislative proposals for financial transaction taxes have been surfacing with increasing regularity for at least a decade. The FTT idea – to impose small levies on trades of stocks and other...
August 21, 2020 | By Jeffrey Kutler
Across the globe, in response to unprecedented economic disruptions caused by COVID-19, central banks have implemented unconventional monetary policies. In the U.S., for example, the Federal Reserve...
August 7, 2020 | By Tianyang Wang
“Complexitocracy” is not in the dictionary. But maybe it should be. If it were, the definition would be something like, “governance or control exercised by an elite of quantitative modelers.” In bank...
July 31, 2020 | By Peter Hughes
The current COVID-19 crisis is leading to questions about the accuracy and efficacy of value-at-risk (VaR) as a risk management tool and as an input to capital computation. VaR measures the maximum...
July 2, 2020 | By Subrahmanyam Oruganti and Yashendra Tayal
The World Economic Forum (WEF) and its research partners believe that asset managers are in a good position to help mitigate some of the world's most challenging risks. In late May, the Forum and...
June 26, 2020 | By Katherine Heires
As the world heads toward a global recession, with plunging equity markets and countries facing severe economic downturns, there are uncertainties and strong beliefs that have practically divided the...
June 19, 2020 | By Nupur Pavan Bang and Anisha Sircar
In mid-May, the Federal Reserve Board released its Financial Stability Report, representing its “current assessment of the resilience of the U.S. financial system.” Needless to say, the Fed is...
June 5, 2020 | By Katherine Heires
The uncertainties of when and how successfully localities restore economic activity extends to structured finance transactions - and there are various scenarios. A national downturn would have to be...
May 15, 2020 | By John Hintze
The increased liquidity and credit risks imposed by COVID-19 have forced many Chinese businesses to rack up debt, with some now in danger of running out of cash. Small and medium-sized enterprises...
April 24, 2020 | By Yu Xiaojian and Zeng Wenzheng
Islamic financial services has tallied a decade of positive growth, reaching $2.19 trillion in global assets as of 2018, according to the most recent Islamic Financial Services Board (IFSB) data....
April 24, 2020 | By Dawn Kissi
"The coronavirus pandemic is a different kind of shock. Never before have modern economies shut down at the drop of a hat." Thus wrote Tobias Adrian and Aditya Narain, director and deputy director,...
April 17, 2020 | By Jeffrey Kutler
Like everyone else, I've been cycling through the five stages of grief these past few weeks, saddened by the human tragedy unfolding across the world and the loss of a way of life that already seems...
April 9, 2020 | By Cristian deRitis
COVID-19 is different from all previous crises. It feels like a combination of a much broader version of 9/11, when all flights were canceled, and a much faster version of the 2008 financial...
April 3, 2020 | By Alla Gil
The dramatic cost in human capital of the extremely contagious, life-altering novel coronavirus has been well documented, but the pandemic has also extracted a heavy toll on China's economy. The...
March 27, 2020 | By Yu Xiaojian and Zeng Wenzheng
An economic system balances in a seemingly precarious equilibrium. It is not unusual for a CRO to be asked how his or her organization will be impacted under a variety of circumstances, including...
March 20, 2020 | By Brenda Boultwood
The coronavirus pandemic has been a true black swan event, significantly increasing liquidity and credit risks in the global financial services industry. However, in China, regulators, banks and...
March 20, 2020 | By Catherine Chen
The coronavirus outbreak sent equity markets into a tailspin and macroeconomic forecasting into overdrive. Publicly discussed scenarios ranged from cautiously benign to alarmingly pessimistic, as...
March 6, 2020 | By Ted Knutson and Jeffrey Kutler
The pending global shift from the Libor interest rate benchmark to an alternative reference rate is rife with legal, accounting, governance and technology complexities, imposing a heavy burden on...
February 21, 2020 | By Alla Gil
In 2017, Alfred Eskandar and Tony Barchetto drummed up a fresh idea to manage the volatility risk of investing in the U.S. stock market. Dubbed truBeta, their process uses risk analytics to build...
February 21, 2020 | By Michael Shari
Financial analytics units of both business information services giant IHS Markit and trading platform operator Liquidnet Holdings said they filled top leadership positions in late January. IHS Markit...
February 7, 2020 | By Jeffrey Kutler
EquiLend Holdings, which was formed in 2001 to operate an electronic trading platform for securities finance, has expanded into the equity total return swaps (TRS) market. The New York-based company,...
January 24, 2020 | By John Hintze
The move away from Libor to an alternative interest-rate benchmark for debt and derivatives pricing is proceeding, although most of the action is around infrastructure to support the transition,...
January 24, 2020 | By John Hintze
The Commodity Futures Trading Commission said it has formed two new subcommittees of its Market Risk Advisory Committee (MRAC): Central Counterparty Risk and Governance; and Market Structure. The...
December 6, 2019 | By Jeffrey Kutler
American Financial Exchange (AFX), a self-regulated marketplace for bank-to-bank transactions and home of the American Interbank Offered Rate (Ameribor) benchmark, has launched on the blockchain. The...
November 22, 2019 | By Jeffrey Kutler
The Commodity Futures Trading Commission said that renowned financial risk manager Robert Litterman will chair the newly impaneled Climate-Related Market Risk Subcommittee of the CFTC's Market Risk...
November 19, 2019 | By Jeffrey Kutler
In September 2019, when a shortage of short-term fund supply caused the repo interest rate to soar, Fed intervention was required to keep it under control. At the time, some wondered if this event...
November 8, 2019 | By Brenda Boultwood
The Volatility Institute at New York University's Stern School of Business, founded in the aftermath of the 2008 financial crisis, has a new name - the Volatility and Risk Institute - signifying a...
November 8, 2019 | By Katherine Heires
“The clock is ticking” has become a regular refrain of regulators intent on keeping financial market participants on course to replace the London interbank offered rate (Libor) by the end of 2021....
October 11, 2019 | By John Hintze
Currently, we're in the longest period of fairly stable markets, but it is still critical to get ready for a potential downturn. Traditional measures of risk in investment portfolios are always...
October 4, 2019 | By Alla Gil
Policymakers, regulators and bankers were jolted from their collective complacency over the impact of nonbank companies on the financial system with Facebook's announcement of its Libra digital...
July 19, 2019 | By Clifford Rossi
“Shadow banking” is a catchy phrase that sounds sinister, sly, slick or shady. Yet that phrase obscures an important fact: Although some forms of shadow banking can be risky, complex or even toxic,...
June 21, 2019 | By Fabio M. Natalucci
While the start of summer has many of us thinking about vacations and outdoor activities, it also kicks off hurricane season, along with the onset of other severe weather-related patterns....
June 14, 2019 | By Clifford Rossi
Investor interest in private equity and the need to diversify and hedge risk in volatile markets are working to the advantage of hedge funds, according to speakers at a recent New York Alternative...
May 24, 2019 | By Juliette Fairley
In the global economy, there are some worrisome trends that could put economic growth at risk. Financial vulnerabilities have been intensifying worldwide as financial conditions remain relatively...
May 3, 2019 | By Tobias Adrian and Fabio Natalucci
The big‐bank replacement for the London Interbank Offered Rate (Libor), known as SOFR (Secured Overnight Financing Rate), is working through some growing pains and development issues, including the...
April 26, 2019 | By John Hintze
Deutsche BÖrse has agreed to acquire Axioma, a New York-based company noted for its cloud-driven, multi-asset-class portfolio and risk management technology and customer base of more than 400,...
April 12, 2019 | By Jeffrey Kutler
Market data giant Refinitiv, having already endorsed United Nations Sustainable Development Goals and established “the link between sustainability and financial performance” as a pillar of business...
April 5, 2019 | By Juliette Fairley
The business of investment management has a technology crisis on its hands - a crisis that not only undercuts the ability of institutions to compete, but costs firms huge sums of money. Firms are...
March 15, 2019 | By Sebastian Ceria
Regulation of environmental, social and governance (ESG) investing, historically focused on corporate-issuer disclosures, is turning increasingly toward investors, according to indexing and risk...
March 15, 2019 | By Juliette Fairley
The market euphoria in Brazil since the election last fall of right-wing populist President Jair Bolsonaro does not mask the fundamentals of economic weakness and the investment risks that accompany...
February 15, 2019 | By Dawn Kissi
For many years, financial institutions have had a difficult time figuring where, exactly, their financial instruments should be allocated. Whether an instrument should be accounted for in the trading...
January 31, 2019 | By Marco Folpmers
Recent input from market participants about their preferred way to transition to a Libor-benchmark replacement surfaced concerns about several interconnected risks. Necessary to address them will be...
January 18, 2019 | By John Hintze
Consumer discretionary spending will keep the U.S. from falling into recession, according to Deepak Puri, chief investment officer and managing director of Deutsche Bank Americas Wealth Management....
January 18, 2019 | By Juliette Fairley
“Buy the rumors, sell the facts” is normally a good trading strategy. It plays nicely to the human bias that the Roman senator Tacitus described as “omne ignotum pro magnifico est,” or everything...
January 11, 2019 | By Gil Shefi
In a 2005 study of CEO employment contracts at U.S. corporations, only three out of 375 cited sexual harassment as grounds for termination. “I haven't done a follow-up study,” says co-author and...
January 4, 2019 | By Juliette Fairley
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