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Operational


CRO Takes a Plea in Archegos Case

The chief risk officer and head trader of Archegos Capital Management have entered guilty pleas and agreed to cooperate in the federal prosecution of the family office’s owner Bill Hwang and chief...

May 20, 2022 | By Jeffrey Kutler


Russia/Ukraine Fallout: Mitigating and Managing a Multitude of Risks via KYC

Sanctions put in place after the Russian invasion of Ukraine highlight the need for companies and risk managers to not only verify the identities of their direct customers and suppliers, but even...

April 22, 2022 | By Cristian deRitis


Is Standard Scenario Analysis Outdated?

When a major risk event unfolds, whether it’s, say, the GFC or COVID-19 or Russia’s invasion of Ukraine, a degree of risk management introspection naturally follows. Financial institutions must...

March 11, 2022 | By Clifford Rossi


Beyond the Chaos: Getting to a Better Supplier Risk Response

While many hoped vaccines would bring a return to business as usual, the unfortunate reality was that businesses faced increasing disruptions in 2021. Due to constantly emerging variants, vaccine...

March 11, 2022 | By Atul Vashistha


One Diverse CRO’s Blueprint for Success: A Q&A with Philip Melville

There’s more than one avenue to success as a financial risk manager. Some take an entry level risk job and work their way up through the ranks. Others begin in a different field and transition into...

March 4, 2022 | By Tod Ginnis


Model Risk Challenges and Opportunities in 2022

Market structural changes, machine-learning techniques and climate risk management initiatives will present some of the most interesting model risk management obstacles and opportunities for banks...

February 4, 2022 | By Clifford Rossi


The Joys and Perils of Spreadsheet Models

Recently, I was surprised to learn that revenues from competitive esports exceeded $1 billion in 2021, an increase of nearly 15% from 2020. I don’t understand the appeal of watching somebody else...

February 4, 2022 | By Cristian deRitis


Citi Plays Risk Advisory Role in Global Vaccine Distribution

Contributing to public-private partnership efforts to supply billions of COVID-19 vaccine doses worldwide, Citibank has teamed up with the U.S. International Development Finance Corp. (DFC) to...

October 15, 2021 | By Jeffrey Kutler


Risk Accounting, Modeling and Non-Financial Risk: An Argument for Better Integration

Not much more than a decade ago, we were in the midst of the global financial crisis. In contrast to the crisis that is now looming - climate change - banks were then the polluters, not with toxic...

August 13, 2021 | By Peter Hughes


How Will Pandemic-Era Data Be Modeled?

Over the next 12 months, as COVID slowly wanes as an economic disruptor, a lot of industry credit risk models will be redeveloped. Historically, these methods have provided superior predictions to...

July 30, 2021 | By Tony Hughes


The Futility of Stress Testing for Unprecedented Scenarios

Consider a new pandemic scenario. In 2023, a pathogen will be discovered that, relative to COVID-19, is twice as deadly and five times as transmissible. It quickly becomes clear that vaccine...

June 25, 2021 | By Tony Hughes


A Modeling Reboot: If Not Now, When?

As the world awakens, one of the vexed questions we face as model risk managers is when to redevelop. The simple fact is that the established procedure of designing and building a model, and then...

April 23, 2021 | By Tony Hughes


Risk Management in a Sea of Unknown Unknowns: The Complex Quest for Resilience

Traditional risk management methodologies have failed during the pandemic, prompting financial institutions to work diligently to improve their agility, resilience and adaptability. But in an era of...

April 23, 2021 | By Alla Gil


OpRisk Capital Chess: Banks Lose First Match

Playing the white pieces, the banks led with the regulatory capture opening. In a sequence of expertly coordinated moves, they progressively took control of the chessboard. That should have led to an...

April 1, 2021 | By Peter Hughes


U.S. Regulators Hire Chief Innovation Officers

The leading U.S. financial regulators are active participants in a movement among supervisory agencies around the world to support technological innovation. But, until February, two prominent banking...

March 12, 2021 | By Jeffrey Kutler


Geopolitics: Risks and Opportunities

Whether we're talking about the U.S.-China trade war or Brexit or climate change or the COVID-19 pandemic, the events of 2020 have highlighted that it's impossible to separate geopolitical and...

February 19, 2021 | By Brenda Boultwood


As Catastrophe Losses Rise, Models Adjust Incrementally

Record numbers of hurricanes and wildfires are unlikely to prompt significant changes in models gauging the probability of resulting losses, but tools accompanying recent catastrophe model updates...

February 5, 2021 | By John Hintze


Machine Learning Expert Joins Abu Dhabi Investment Authority

Marcos Lopez de Prado, a Cornell University professor of practice, the Journal of Portfolio Management's 2019 Quant of the Year Award winner for machine learning innovations in asset management, has...

October 2, 2020 | By Jeffrey Kutler


Model Risk and the COVID-19 Reality

Looking in the rearview mirror, it's usually easy to see whether previously accepted risks were adversely realized. The moment you pay back the $20 I loaned you last month, for example, I know that...

September 25, 2020 | By Tony Hughes


Pandemic Challenges: How to Balance Resilience and Profitability

Pre-pandemic, higher corporate profits were often delivered by under-investing in internal controls and minimizing any operational process redundancy. During the pandemic, inadequate redundancies for...

September 18, 2020 | By Brenda Boultwood


People Risk: A Post-Pandemic Management Framework

COVID-19 has forced businesses to rethink the way they treat and manage employees. Considering the work-from-home strategies adopted by many firms and the general economic decline, there is now an...

August 21, 2020 | By Brenda Boultwood


Plastics and the Planet: Who Will Bear the Costs?

At a time of growing concern about climate change and sustainability, pollution attributable to production and accumulation of plastics is raising questions relating to the extent of the long-term...

July 17, 2020 | By Jim Romeo


The Unconventional Skills Chief Risk Officers are Now Seeking

Prospering in the new normal will require a keen focus on the customer and risk management team skill sets that enable organizational agility. Business managers decide daily the risks that are worth...

July 17, 2020 | By Brenda Boultwood


Veteran Bank Risk Executive Joins Third-Party Monitoring Firm

As COVID-19 and the global economic slowdown expose vulnerabilities in third-party networks and industrial supply chains, a firm specializing in monitoring and managing those risks has hired a former...

May 22, 2020 | By Katherine Heires


Stimulus Loan Forgiveness Is Going to Be a Nightmare for Banks

There are complaints small businesses are being lured into a stimulus loan bait-and-switch. Businesses pursue a CARES Act loan expecting it to be forgiven, only to discover later small print that...

May 22, 2020 | By Peter Downs


Pandemic Prescription: Resolve, Resources and Resetting of Beliefs

A recent GARP Risk Intelligence article, A View from South Asia: This Time Is Different, looked back from the pandemic crisis to how India's Xennial generation experienced the evolution in...

April 17, 2020 | By V.P. Jyotsna and Nupur Pavan Bang


AICPA Introduces Audit and Risk Reporting Framework for Supply Chains

The coronavirus crisis put a spotlight on global supply chains and the havoc that can result from any weak or disabled link between source and destination. As if on cue, the American Institute of...

April 3, 2020 | By Jeffrey Kutler


How to Prepare for and Manage Unanticipated Global Risks

The scale and severity of the coronavirus outbreak sent shockwaves around the globe. The threat to human life and the need to protect our most vulnerable necessitated unprecedented levels of change,...

April 3, 2020 | By Peter Bannister


A View from South Asia: This Time Is Different

Countries around the world are struggling to keep up with the pandemic coronavirus. Global stock markets are on a downward spiral due to fears of recession, massive drops in demand, disruptions in...

March 27, 2020 | By Nupur Pavan Bang


Nasdaq Names a Chief Risk Officer, SEC a Chief Data Officer

Nasdaq has reached around the world for a chief risk officer, while the U.S. Securities and Exchange Commission falls in line with peer agencies and firms that it regulates by appointing a chief data...

February 7, 2020 | By Jeffrey Kutler


How to Become a Better Risk Modeler: Debating the Validity of Significance Tests

Those engaged in social science - a category that includes most forms of risk modeling - are often accused of being bad scientists. The accusations generally come from physical scientists, who enjoy...

January 17, 2020 | By Tony Hughes


Third-Party Risk Group Upgrades Toolkit for 2020

For the financial services industry, long reliant on connections to external system and services providers, “third-party risk management is not new,” consulting firm EY and the Institute of...

November 27, 2019 | By Jeffrey Kutler


Operational Risk Veteran Is Named CRO at CLS

The CLS foreign exchange settlement services utility has named longtime operational risk executive Deborah Hrvatin chief risk officer. CLS said on November 5 that Hrvatin, most recently of Citigroup...

November 8, 2019 | By Jeffrey Kutler


Third-Party Risk Efforts Suffer from Underinvestment

There is broad agreement on the expansive vision and holistic mobilization required for effective management of third-party risks, but a Deloitte survey indicates shortfalls in execution....

October 25, 2019 | By Ted Knutson


Conservative Banks Do Not Need Conservative Models

When banks manage risk, conservatism is a virtue. We, as citizens, want banks to hold slightly more capital than strictly necessary and to make, at the margin, more provisions for potential loan...

October 11, 2019 | By Tony Hughes


Model Validation Need Not Be a Blood Sport

My team did a big validation project for a financial institution a few years ago. We were actually the backup, external validators called in to resolve a disagreement between the model build team and...

September 13, 2019 | By Tony Hughes


One-on-One with the CRO of Fannie Mae

Over the past 32 years, John Forlines has worn many hats at Fannie Mae - the mortgage giant that ranked 22nd on this year's Fortune 500 list. Starting his career in the internal audit group in 1987,...

September 6, 2019 | By Robert Sales


The Critical Importance of Incident Reporting

Security incidents are inevitable. Responding to and resolving them begins with a fundamental first step: reporting. Michael Humphrey points out that it is “only human” not just to make mistakes, but...

September 6, 2019 | By Jeffrey Kutler


Shared Assessments Adds Module to Third-Party Framework

Two months after unveiling its Third Party Risk Management (TPRM) framework, the Shared Assessments third-party risk assurance program announced the availability of a new module covering periodic...

August 30, 2019 | By Jeffrey Kutler


Expense Management Is a Matter of Culture

For good reason, “cost reduction” has become a dreaded term in the corporate world. Most often, when faced with subpar financial performance, the first resort for many organizations is to issue a...

August 9, 2019 | By Vafa Vahid


Best-Practices Guidance for Third-Party Risk

Eyeing perceived gaps and mounting complexities in third-party risk management, the Shared Assessments Program is offering a comprehensive framework and guide to promote best practices in the field....

July 12, 2019 | By Ted Knutson


Operational Resilience: The Critical Need to Learn from Failure

High-profile IT failures, ranging from the Equifax data breach to TSB's botched tech upgrade to the damaging customer-account problems at Barclays and RBS, have recently proliferated in the financial...

May 31, 2019 | By Jo Paisley


Building Operational Resilience in an Age of Disruption

For centuries, physicists have tried to arrive at a “theory of everything,” or one grand cosmic principle that explains the mechanics of the universe. Einstein came close with his theory of...

May 24, 2019 | By Brenda Boultwood


Vendor Risk Programs 'Running to Stay in Place'

For all their attention to, and observable improvements in, vendor risk management, companies are struggling to address mounting cost, regulatory and governance challenges, according to the 2019...

May 10, 2019 | By Ted Knutson


The History of Risk Management: 30 Centuries of Innovation

Fascinating events have radically altered the course of financial risk management for the past 3,000 years - starting with Homer's definition of value back in the 8th century B.C. and moving all the...

March 22, 2019 | By Marco Folpmers


Hard-Brexit Uncertainties Stretch Well Beyond Financial Services

Much guesswork surrounds the consequences of a hard, or no-deal, Brexit - the possibility that the United Kingdom will leave the European Union on March 29 without an agreement for a smooth...

March 8, 2019 | By John Hintze


Innovative Steps Toward Gender Equality

Research has shown that women make or influence 80% of consumption decisions and account for (U.S.) $20 trillion of consumption expenditure. It would make sense for companies to get this fairly large...

March 6, 2019 | By Nitya Bodavala and Nupur Pavan Bang


How to Manage Reputational Risk

As Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it.” This rings especially true today, as high-profile crises - including cyberattacks, product recalls...

March 1, 2019 | By John Thackeray


The Best Tool for Operational Risk Management

If you want to learn from the operational risk mistakes of others and prevent incidents that could severely impact your firm's reputation and bottom line, then case studies are your best bet. An...

February 22, 2019 | By Marco Folpmers


More Attention and Discipline for Third-Party Risk

Growing sensitivity to third-party risks - extending out to fourth, fifth, and nth parties - is resulting in more rigorous management and higher prioritization of these ecosystem exposures, according...

January 25, 2019 | By Juliette Fairley



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