The Annual Risk Capital Conference will be held on 19 - 23 September 2011 in Frankfurt, Germany. I will be attending this conference on behalf of the GlobalRisk community and will report back with key observations and discussions from the conference.
I am opening this forum to ask for the questions you wish to be asked at the sessions, or from the delegates. I will do my best to pose these questions and report the responses back to our community. We are working with the conference organizers to arrange interviews with specific speakers. The agenda is rich, broad and includes:
New Strategic Thinking & Practical Implementation Techniques In Capital Allocation, Stress Testing, Credit, Market & Liquidity Risk Requirements For The New Basel Framework
NEW STRATEGIC THINKING AND PRACTICAL INNOVATIONS IN GLOBAL RISK MANAGEMENT
THE LATEST INNOVATIONS IN RISK MODELLING, MEASUREMENT
Basel III Regulatory Insight
MANAGEMENT IN THE NEW REGULATORY LANDSCAPE
Please use this forum to submit the questions you would like me to ask and also point out the specific speakers that are of of interest to you.
You can find the conference information in our event section here: http://globalriskcommunity.com/events/ri-k-capital
Stay tuned!
Replies
RE Capital Management - if it is cross-currency capital flows we are discussing we need to take a fresh look.
I think that if America had not sold their bonds to the Chinese and others we might not have seen so many jobs exported from America because the Chinese would have lost a major tool for holding down the value of their currency.
And anyway, why would we want the value of the currency to be changed by cross currency capital flows?
The currency is there at a market rate intended to balance trade, not capital.
The question to ask at the forum is:
"Would anyone like to join me in setting up a study on what the best alternatives are for cross-currency investments?
Boris Agranovich said:
OK. Deleted. Thanks Boris.
Can you get me onto a platform as a speaker one day?
I got 30 feedback forms twice for two seminars given at universities and they almost all wanted me to stay around.
Excerpts from the presentation "Measuring The Cumulative Economic Impact of Basel III" by Philip Suttle, Deputy Managing Director and Chief Economist at Institute of International Finance
Results of IIF Study in Summary
• Implementing the current reform agenda fully will have a meaningful impact on the global economy:y y- Reduce (GDP-weighted) average level of GDP by 3.2% by 2015- Level of employment about 7.5 million lower by 2015
• It will require significant changes in bank balance sheets- Additional core Tier 1 capital needs of about $1.3 trillion by 2015
• This leads to a significant tightening in lending conditions- Combination of higher lending rates and/or lower lending quantities- Lending rates could be about 360bp higher over next 5 years
• Reform may not produce the stability benefits hoped for
- May not reduce probability of future crises
Some excerpts from the presentation of Paul Embrechts, Department of Mathematics, Director of RiskLab, ETH Zurich. Senior SFI Chair
Some mathematical soul searching, from L.C.G. Rogers (Cambridge, UK), On Mathematics, Finance and Banking:
In maths, , a result is right if it’sproved, In math finance, a result is right if it’s published, In banking, a result is right if it’sprofitable.
Did you know that in January 2007, in the US, there were about 12 AAA-rated companies, and about 65 000 AAA-rated securitization instruments?
Some very basic RM rules:
• If you don’t understand it, don’t buy/sell it
• Speak to “the guys in the boiler room”
• Beware of “new” paradigms, like the NewEconomy, the New Risk Management:“new” usually means that tried and trusted measures of the past are being ignored
• Always understand your gains and beware of volume (even/especially AAA)
• Concerning Basel II+ or III: do not try to reinvent the wheel, check countries and institutions that came through the crisisless harmed, understand why!!!
With respect to the crisis,in particular:
• Personalities: too many Gordon Geckos out there, at all levels
• The near total failure of risk management (of the type «get out of the way»)
• The belief in the existence of a lender of last resort, government «guarantees»
• Collateral calls/triggers (�� embedded)
• No lessons learned from LTCM 1998
• Near criminal accounting and regulatory arbitrage
An excerpt from the Norbert Walter's presentation:
SPECIAL GLOBAL ECONOMIC ANALYSIS Identifying The Future Economic ‘Hotspots’ &The Implications For Risk Managers
The Implications For Risk Managers:
-Simpler, more transparent business models are a must!
-Risk managers must be independent, supported by remuneration (fixed, not bonus!)
-Black Swans, Fat Tails should be considered more frequently
- Times have changed – returns are down, risks are up
- Much higher equity positions, to secure survival
- Multi disciplinarity is a must – risk management teams have to reflect this need
- Mega Trends (Demography, Digitalization, Technological Breakthroughs, Internationalization, Back to Ethics,Religion, Family)
What plan(s) does the global risk community have to minimize state sponsored and/or rogue events of cyber hacking/terrorism? Please address this on both an essential public services platform (as provided by private sector entities) and a sovereign platform (essential services provided by public sector agencies).
Thank you.
Jeffrey L. Allen, Broker PLLC
Institutional Investment Banking
@ Boris,
Thank you Boris - I appreciate your comments.
As for questions, I might be able to frame one but it is a question that they would need to research beforehand and which might better come from someone else.
Given that I am bent on creating two new asset classes or one with two sub-classes, the question would be along the lines of "Do you think that these assets will play a significant role in the financial services industry and your investment portfolios in the future?"
The asset class is investments in debt with a return linked to AEG% p.a. or GDP growth % p.a. or some incomes index plus a coupon.
One would be for Housing Finance making it safer
and
the other would be Linked Sovereign Debt enabling fund managers to select the Beta Value they need for marketing purposes as long as the sovereign debt was in the right currency with the right risk rating.
I spell out some of the advantages to the national economies concerned on my blogs. But there is more to it. In particular fund managers often like high cash flows and high fees for being clever. But on average they are average lol and as for high cash flows, these would come from the same family of investments when Sovereign Debts were being repaid. A 10, 20 or 25 year bond repaid with a constant 'income value' payment of around 5% - 12% p.a. for the duration could be on offer.
Some good annuities could come from that as well as cash inflows to funds.
Finally, with high volumes of safe assets relative to what we have now, markets would be less panicky. Banks much safer.
Regards,
Edward
@Edward,
I will be happy to introduce you and point people to your blog. I really think that there are great ideas over there. The real purpose of this thread is that I want to collect some specific questions on the subject matter of Capital management and regulation for the conference speakers. Do you have such specific questions?
@ Boris
You could ask them if they know who I am and would they want me to speak at the conference.
You could introduce me via my blog.
I attach some testimonials about me.
There is also one on a seminar that I gave at a university - see my LinkedIn Profile recommendations.
The best starting points are not always the most obvious. If you turn the box a different way, a new view of a corner can lead to a solution for a problem we did not recognize.
Why is risk something that must be shared?
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