The 2nd Annual RiskMinds USA Conference will be held on 13 - 17  June 2011 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.  GlobalRisk is working with the conference organizers to arrange interviews with specific speakers.  The agenda is rich, broad and includes:

- Articulating, Setting & Embedding Risk Appetite
- Risk Governance, Non-Executive Oversight & The Relationship Between The Board Of Directors And The CRO
- Effusing A Culture Of Risk Management Throughout The Business
- Building A Holistic Risk Management Framework
- Defining How Risk Managers Can Add Value In The New Austere Environment

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 community posts and on the conference information site: http://globalriskcommunity.com/events/riskminds-usa

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  • Glenn,

     

    Great question.  I posed your question but do not have a clear answer for you.  However, I believe that when all the RiskMinds documents are posted, you will find what you are looking for -sorry if I can't be of more help.


    Glenn Donovan said:

    Why is the financial risk management field lagging related fields, such as computational economics and behavioral economics, in adopting simulation techniques like Agent Based Modeling to better predict severe swings in financial markets?

  • Gerald,

     

    It is fair to say that your view is widely shared.  The experts agree with you that for effective risk management, we must develop practical solutions to the business challenges and setting the appetite by the Board and calculating capital are elements of such good risk management, specially in a global, inter-dependent financial environment.

     

    Gerald Wilson said:
    Have we lost our way as risk leaders. Shouldn't we be developing practical solutions to the business challenges instead of simply calculating economic capital or letting the Board develop the risk appetite?

  • Rajarshi,

     

    With regard to your question, McKinsey&Company has done a great review of this topic in collaboration with 44 global financial institutions of various sizes.  This report or the presentation slides were not made available to us.  However, it will probably be posted by the RiskMinds organizers and you can take a look at it.   The number that I recall is that depending on the size, jurisdiction and complexity of the institution, an average spend on Risk IT of $400MM in the next 5 years may be allocated in some institutions to meet the regulatory and best practices' requirements.

    Rajarshi Banerjee said:

    I would really like to understand what the market size or total IT spending for Risk Management in FSI is, and more specifically in banking. I've got estimates ranging from $4 bn to $40 bn and even more, so would want to know how Banking (and FSI) CROs define the risk management taxonomy for their institution.

    Thanks

    Rajarshi

  • Connie,

    In response to your question, the consensus is that there is no "silver bullet" in that the "frameworks" that institutions have in place should be sufficiently effective "IF" each element of the framework is carefully and transparently examined, implemented, monitored and revisited often for any additional "fixes" to meet the best practices and the new requirements.  In other words, the framework/programs should be nimble enough to adjust to the risk environment and well thought-through and robust enough to withstand the test of time, jurisdiction and new requirements.  None of the financial institutions that I heard speak about this topic had any new risk program element or infrastructure that would give us that "aha moment".  They basically use RCSA, BEIC, etc. and top down enforcement.  Thanks for your good question.


    Connie Valencia said:

    I have a 2 part question.  First, I would like to know the panel's opinion(s) on: What is the best source of information to gaining insight on a Corporation's risk environment?  Most common answers I've heard are:

    1) industry standards / guidance

    2) data / key metrics (i.e. product returns, employee turnover, # of complaints etc)

    3) market trends (i.e. fuel fluctuation, currency exchange, industry average etc)

    4) human intelligence (i.e. interview key employees / executives)

    5) insurance broker / banker / lender etc

     

    The second part to my question is: How do you a) obtain this information and b) how is the information analyzed or interpreted to make strategic risk mitigation decisions?   

    Thanks,

    Connie

  • Yes, I should've clarified. I meant Financial Services Institutions comprising Banking, Capital Markets and Insurance.

    Gerald Wilson said:
    Have we lost our way as risk leaders. Shouldn't we be developing practical solutions to the business challenges instead of simply calculating economic capital or letting the Board develop the risk appetite?
  • Why is the financial risk management field lagging related fields, such as computational economics and behavioral economics, in adopting simulation techniques like Agent Based Modeling to better predict severe swings in financial markets?
  • I have a 2 part question.  First, I would like to know the panel's opinion(s) on: What is the best source of information to gaining insight on a Corporation's risk environment?  Most common answers I've heard are:

    1) industry standards / guidance

    2) data / key metrics (i.e. product returns, employee turnover, # of complaints etc)

    3) market trends (i.e. fuel fluctuation, currency exchange, industry average etc)

    4) human intelligence (i.e. interview key employees / executives)

    5) insurance broker / banker / lender etc

     

    The second part to my question is: How do you a) obtain this information and b) how is the information analyzed or interpreted to make strategic risk mitigation decisions?   

    Thanks,

    Connie

  • Have we lost our way as risk leaders. Shouldn't we be developing practical solutions to the business challenges instead of simply calculating economic capital or letting the Board develop the risk appetite?
  • Rajarshi, thank you -to clarify, by FSI you do mean financial services institutions?

    Rajarshi Banerjee said:

    I would really like to understand what the market size or total IT spending for Risk Management in FSI is, and more specifically in banking. I've got estimates ranging from $4 bn to $40 bn and even more, so would want to know how Banking (and FSI) CROs define the risk management taxonomy for their institution.

    Thanks

    Rajarshi

  • I would really like to understand what the market size or total IT spending for Risk Management in FSI is, and more specifically in banking. I've got estimates ranging from $4 bn to $40 bn and even more, so would want to know how Banking (and FSI) CROs define the risk management taxonomy for their institution.

    Thanks

    Rajarshi

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