GlobalRisk Community - I will be reporting from the Enterprise Risk Management in the Banking Industry Conference this Thursday and Friday in NYC.....I will be posting the session topics later, so you will be able to direct specific questions to the presenters. Stay tuned!

You need to be a member of Global Risk Community to add comments!

Join Global Risk Community

Votes: 0
Email me when people reply –

Replies

  • 1.  Lack of clarity with rules and regs

    2.  Getting buy in from all lines of business

    3.  Modeling accurately

    4.  Sheer size of many institutions

     

  • Hi Michael,

     

    Thank you.

     

    Did they outline any pain points they are experiencing implementing ERM strategy in order of importance?

     

  • From a high level overview, all of the institutions agreed that the regulatory agencies are still trying to get a handle on the latest legislation and this was echoed by a senior level person from the FDIC - "that one year after Dodd Frank, the rules were still 'ripening'."  Especially in regards to an institution having a "Living Will."  More oversight and authority has been given to the FDIC and the creation of the Office of Complex Financial Institutions has bolstered the oversight with banks "To Big To Fail."  The transparency of these banks is becoming much improved.  The far reaching tentacles of Lehman Brothers non-banking divisions drove it into bankruptcy and lack of transparency has had a far reaching effect.  Much more emphasis is being placed on a bank's insolvency/distress plan and understanding the legal entity. 

     

    The regulators have begun taking a much more consultative approach and all the institutions polled said that having these ongoing communications with their prospective regulators has helped with ERM.  The carrot and the stick approach is being replaced by open ended discussions, whereby the bank and regulators really have the ability to explain and understand the processes put in place. 

  •   


  • Dear Oscar . . . thanks so much for the question and a promotion to Dr.  My Grandmother will be very proud of me.  :)  This question covers a little slice of risk that is an important part of ERM - The conference really took a top down approach, so the question was over the heads of these enterprise risk planners.  I think we should throw it out to the GlobalRisk Community for their feedback!  Cheers - Mr. (definitely not Dr.) Wein

     

    Oscar said:

    Dear Dr Wein:

    Suppose, there is someone with an immaculate credit history, that is, thrice  he 
    has borrowed, the amounts are 100, 200 and 300 k. Now the Borrower wants to get a new credit of 1 M. What is the risk of crediting him the money he wants ? 
    Should you feel like in trouble, feel free to get in touch. Thank you

    Oscar Tagiyev, PhD 
  • Hello Johnny - there were 50 participants in the conference, ranging from top global institutions to a $900M USD community bank.  The conventional wisdom was a combination of a&b.  Many of the firms employed their own talent to model, build and integrate - and the running joke was that they kept hiring away one another's best modelers.  Some of the smaller banks used hosted to save time, energy and bandwidth in their IT/Risk departments - and cost really came up less than efficiency.  Although risk was monitored realtime, understand the reporting and action plans were revamped annually all the way down to monthly. 

    Johnny Huh said:

    Hi Michael,

     

    My questions are

    1) how are they building out this system?

    a) building in house

    b) buying off the self

    c) combination of a & b

    2) are there sufficient talent in house to model, to build, and to integrate?

    3) will hosted/managed service considered due to cost and if they do not have the expertise in house?

    4)  is end of day sufficient or due to dynamic of the market, strive towards real time as possible?  If'yes', what is the definition of real time? microseconds?

     

    Thank you.

  • Hi Michael,

     

    My questions are

    1) how are they building out this system?

    a) building in house

    b) buying off the self

    c) combination of a & b

    2) are there sufficient talent in house to model, to build, and to integrate?

    3) will hosted/managed service considered due to cost and if they do not have the expertise in house?

    4)  is end of day sufficient or due to dynamic of the market, strive towards real time as possible?  If'yes', what is the definition of real time? microseconds?

     

    Thank you.

  •  

    A) What current "published studies" have there been in "Hazard Chain Mismanagement" - as opposed to "Value Chain Management"  and ...

     

    B) Can an intelligent argument refute the following risk management premise:  All potential time-space fields of risk are i) seeded, ii) self-amplified and iii) sustained by the "Lack of timely information acted on."

     

    Thanks 

  • What would be the downside of electronically guaranteeing the reserves of the World Bank for a period of time--a year, for example.  This is what is being done with the financial institutions in the United States.  If there is a crisis and financial company reserves fall, the treasury replaces them with computer-generated dollars.   This is based upon the very simple concept that whatever disappears into the void should be retrievable from the void.  This remedy has not existed heretofore in such a secure form and may represent a quantum leap in the stabilizing of the world economy.

    Thank you

    Frank True

    Centennial, CO

  • Hi,

     

    I'd ask about systemic risks:

    What are the best practices for including systemic risks (such as systemic liquidity risk, risks arising from system's leverage etc) into ERM?

    Which systemic risks have been identified?

    How they are being measured/monitored?

    How systemic risks are taken into account e.g. in credit decisions and in pricing decisions?

    Assessments to the current levels of systemic risks?

     

     

    Br,

    Kristi Rohtsalu, analyst and financial blogger

    http://blog.logicoffinance.com/

    Latest articles: Sketching Sustainable Future for Finance; Global Finance and Economy: a Hot Summer Indeed

This reply was deleted.

[Free COVID-19 Framework] What's the path to recovery look like?

We created a free presentation (attached), which discusses both global and organizational impacts of the COVID-19 pandemic, along with critical actions organizations should take immediately. This presentation introduces a framework that helps regions and organizations navigate a path to recovery via 9 potential scenarios. These scenarios capture outcomes related to GDP impact, public health response, and economic policies. The presentation also breaks down 6 immediate and critical actions…

Read more…
3 Replies · Reply by Boris Agranovich Jan 2, 2021
Views: 90

If risk management is about decision making, are current risk management solutions irrelevant?

Now that the updated COSO and ISO risk management standards emphasize a connection to enterprise objectives and decision making, does this mean ERM and GRC solutions focused on risk registers and regulatory compliance are missing the true value of risk management?Will current risk management solutions evolve to integrate more decision support functionality or will standalone prescriptive analytics and other technology solutions take a more prominent role in enabling risk-informed…

Read more…
3 Replies
Views: 55

A question related to classification of instruments between trading and banking book.

We have an interesting question from one of our members.       "We usually perform OTC FX transactions with clients backed-to-back on the market (with Banks). Now we are going to perform a FX swap (i.e. Spot + forward) JPY/EUR for the Bank account for 1 week at the longest. The purpose is to get EUR place @ CB for LCR compliance purpose (no trading purposes). Bank's Management think that this should be considered as a trading position and therefore be classified within the Bank's trading book.…

Read more…
4 Replies
Views: 139

Plunging oil prices: curse or blessing in disguise?

The recent sudden crash of oil prices has had a major impact on the world economy, leading to many troubled faces in the international arena. The Russians fear the effects of yet another powerful hit on their economy, Venezuela seems to be considering default and the Americans are weary of the consequences for its young and emerging shale oil industry. And then you have the Middle East, where the smallest match is enough to ignite the largest fire. But are these worries really justified or…

Read more…
1 Reply
Views: 28

Introducing the Global Risk Series - Book 1 Risk Management How Tos

Dear GlobalRisk Community member, Our community’s mission is to foster business, networking and educational explorations among members. Learn from some of the top experts in the industry as they clearly explain how to approach the most important Risk management concepts. Check out their expert tips and use the link at the end of each article to navigate back to the website to leave your comment or ask a question. Some of the topics include: How do you Explain Risk Appetite?  How to Prepare a…

Read more…
12 Replies
Views: 346

    About Us

    The GlobalRisk Community is a thriving community of risk managers and associated service providers. Our purpose is to foster business, networking and educational explorations among members. Our goal is to be the worlds premier Risk forum and contribute to better understanding of the complex world of risk.

    Business Partners

    For companies wanting to create a greater visibility for their products and services among their prospects in the Risk market: Send your business partnership request by filling in the form here!

lead