Category: Risk Management
New ESG Consultation announced by European Banking Authority (EBA)
The European Banking Authority (EBA) announced a new consultation for banks on identifying, measuring and managing ESG risks, including setting plans to address risks arising from the EU’s transition to a climate-neutral economy. Requirements would include undertaking regular assessments of ESG risks through data analysis focusing on exposure, portfolio and scenario-based approaches. It is recommended […]
By Manoj Kulwal, Eureka Financial Faculty An organisation may have several business units and the activities of each unit may be unique e.g. a bank may have a retail banking and commercial banking business units. Each business unit will be exposed to a set of risks that may influence its ability to achieve its objectives. […]
Calculating IRB formula for capital requirements in Basel II – The HangZhou Constant
By: Fred Vacelet, Eureka Financial Faculty The Basel II text, in its IRB (Internal Rating Based) formula for capital requirements, ignores a few unpleasant properties of the calculations when PDs are low: capital requirements negative, division by 0, non-monotonicity, to name but a few. Above a PD of 0.03% (the minimum for non-public entities), we […]
Corporate value destruction: economics versus corporate governance
By: Seamus Gillen, Eureka Financial Faculty I remember once discussing with George Alagiah, long-time journalist and BBC presenter, his views on value destruction. He said he had come to realise that ‘it all boiled down to economics’, which reminded me of President Clinton’s comment that “it’s the economy, stupid!” I had a different view, and […]
Operational Risk recognised as the most important risk by financial institutions
By: MartketWatch.com Chartis nominated SAS OpRisk system as the leader in the market for Operational Risk Management. Payman Mestchian, Managing Partner at Chartis says that their research suggests that “operational risk is now recognized as the most important risk by financial institutions. Also the scope of coverage for operational risk management processes and systems is […]
ERM – Lessons learnt since the financial crisis and where practices are still lagging
Lessons learnt after the crisis With signs that the global financial crisis is on the wane; five years after the fall of Lehman Brothers analysts are asking what lessons, if any, have been learnt along the way. To this end Treasury & Risk put a series of questions to US actuary and financial risk management […]
Tougher measures on capital requirements proposed by the regulators
By: FT.com Global regulators on Thursday proposed new measures to toughen up the regime that governs capital requirements for banks’ trading books. The Basel Committee on Banking Supervision issued a consultation paper proposing that banks use a standardised approach to determine how much capital they need to hold to cover trading book risks, as a backstop […]
10 Questions each Risk Manager should ask himself
By Stanley Epstein The whole aspect of Risk Management has taken on a much higher profile over the past few years, driven by many new factors. In the financial industry the crisis that so unpleasantly arrived on our doorstep in 2008 has been a major catalyst while other recent events such as 9/11, the recent […]
Working together to combat money laundering
7th Annual European Financial Crime Conference On 21st October the European Financial Crime Conference takes place in London. Key areas to be debated over two days include current thinking on AML compliance and a review of the EU’s AML agenda. The conference is expected to draw in delegates not just from the UK and EU […]
The Libor effect on derivatives
The UK Court of Appeal is this week hearing two cases in an attempt to determine whether the Libor rate rigging scandal can be considered to be sufficient grounds for invalidating derivatives contracts. In the first of the cases Barclays attempts to overturn a previous judgement which would see it having to defend in court […]