October 2012 Blog Posts (33)

Hurricane Sandy and the RIMS ERM Conference 2012

This week I faced the ultimate personal test of my risk management skills, where I had to soul search “do I practice what I preach as an ERM expert.”. Sunday, the night before the storm of the century Hurricane Sandy hit, I had tickets to fly to Texas as a speaker and expert on ERM. What would become of my home and family? Had I applied the same risk principles in my work as a CEO of the leading…


Added by Steven Minsky on October 31, 2012 at 7:00pm — No Comments

Trading swaps in a cleared world

Meet Joe. Joe is a swaps trader within a small institution that has a straightforward hedging strategy at both the micro and macro level. Being a price-taker, Joe has built and maintained broker relationships that enable him to easily get a swap priced at an acceptable level provided counterparty limits allow. Joe’s back office is practicing weekly collateral exchange with various counterparties in cash. As such, Joe lives in a very comfortable world.

But Joe is in for a nasty…


Added by Tom Riesack on October 31, 2012 at 6:43am — No Comments

Big Mistake Making Reconciliation Tool of Choice Excel

A big mistake that financial institutions are still making is using Excel as their reconciliation tool of choice. Research we have carried out suggests that in many of the larger financial institutions over 80% of reconciliations are performed in Excel or other user developed applications (UDAs).


The lack of rigorous enterprise-wide tools for ensuring that quality, reconciled auditable data is used to manage the banks’ risk has not gone unnoticed by regulators. The latest…


Added by NeilVernon on October 30, 2012 at 2:00pm — No Comments

10 reasons why risk analysts should categorise risk

I am a big believer in the categorisation of risk events and while this may not be popular among many of the non-banking members of the risk community, even more so with ISO 31000 practitioners, I still believe it is an important exercise to carryout.

Either way; I have taken to list ten reasons why causal event categorisation…


Added by Martin Davies on October 30, 2012 at 12:17pm — No Comments


The days of slowly and reluctantly accepting change are over for Brokers and Carriers in the Health, Life, and Voluntary Benefit  Markets.  Forces that are out of their control have taken over! 

For decades the Health and Life (H&L) Insurance Markets - Including the Insurance Carriers, Brokers/Agents, and Service Providers - have reluctantly accepted change on an Evolutionary Basis. While competition was stiff, most parties were enjoying a stable and profitable…


Added by Philip Eide on October 30, 2012 at 3:31am — No Comments

Model Risk Management in U.S. Regional Banks

Errors in financial models that banks use on a daily basis could lead to tremendous financial and non-financial losses. It is crucial for banks to understand how they could minimize and manage model risk effectively. In addition, the OCC and the Federal Reserve have recently released new guidelines on model risk management, which will significantly modify their existing model risk management practices.

Andrew Hrdlicka answered a series of questions written by GFMI before the…


Added by Michele Westergaard on October 29, 2012 at 5:23pm — No Comments

ERM Compliance and Enforcement

In my last blog and On-Demand Webinar “Presenting Risk Management to the Board,” I was asked for help identifying…


Added by Steven Minsky on October 25, 2012 at 4:00pm — No Comments

Big Data…Big Deal?

With the recent introduction of recording for voice and SMS on mobile phones for trading activities in the UK, many technologists were raising the issue of “Big Data” as additional voice recording requirements contribute to the growing repository of data being held by their firms to meet with regulator requirements. Although regulators around the globe are driving for greater visibility and a more comprehensive record of past trading activities, this additional data can also serve a purpose…


Added by Sebastien Jaouen on October 25, 2012 at 1:00pm — No Comments

A New Quantitative Approach: Advanced Exposure and CVA for Exotic and Vanilla Instruments

Syndicated Content Originally Posted on the Numerix Blog


By now, we all realize that financial practitioners around the globe are…


Added by Cristin Riffle on October 23, 2012 at 9:00pm — No Comments

Addressing the LIBOR Debate: The Role of LIBOR in the Valuation of Derivatives

Syndicated Content from the Numerix Blog - Find Original Post Here

In this video blog, Numerix Host James Jockle, SVP of Marketing, and…


Added by Cristin Riffle on October 23, 2012 at 5:30pm — No Comments

OTC Clearing: part 8 - Bilateral margin requirements: a liquidity vortex?

$30,000,000,000,000 - This huge figure is the estimated additional liquidity financial institutions worldwide will need if the current proposal by the International Organisation of Securities Commissions (IOSCO) and the Basel Committee on Banking Supervision (BCBS) on margin requirements for non-centrally-cleared derivatives were to be implemented.

The estimate was…


Added by Tom Riesack on October 23, 2012 at 3:50pm — No Comments

The Risk Clock

Some risks are cyclical in nature which can be modeled on a risk clock.

In this blog we build up a risk clock and look at why…


Added by Martin Davies on October 23, 2012 at 1:29pm — No Comments

Are you watching World RIsk and Insurance News? See the preview here...

Added by J. P. Greene on October 18, 2012 at 2:20pm — No Comments

OTC Clearing: part 7 - If they build it, will they come? A look at electronic OTC trading venues

One of the mandates of the 2009 G20 summit was to ensure the electronic trading and central clearing of standardised OTC derivatives. OTC or ‘over-the-counter’ is seen as the antonym to exchange-traded or ‘listed’ in most literature. Now, global regulators seem intent on removing OTC from the trading landscape.

Shifting bilateral OTC activity onto electronic platforms – organised trading facilities (OTFs) in Europe and swap execution facilities (SEFs) in the US – is the way regulators…


Added by Tom Riesack on October 16, 2012 at 4:55pm — No Comments

Mitigating Risk through Improved Processes and Policies, Interview with Christian Ferrer, Director, Head, Global Commodities Trading Market Risk at Bank of America Merrill Lynch

Our partners at marcus evans conducted an interview with Mr. Christian Ferrer,,Director, Head, Global Commodities Trading Market Risk at Bank of America Merrill Lynch and a Speaker at the marcus evans 5th Annual Risk Management in Energy Trading Conference recently and kindly gave us a preferential permission to publish it on our website.…


Added by Boris Agranovich on October 16, 2012 at 9:45am — No Comments

How to Prepare a Risk Statement

Here are a few tips about risk statements and a link to one of my presentations where I outline how to complete a risk statement.

First and foremost a risk statement is a conversation between the risk owner and any stakeholders that have or should have an interest in the…


Added by Bryan Whitefield on October 16, 2012 at 2:35am — No Comments

The name of this organization suggests an interest in Risk Reduction

I am a former Stock Options Market Maker on the CBOE and the Pacific Stock Exchange. I and some others used a strategy of identifying mis-priced calls and puts. We sold the over-priced and bought the under-priced and then hedged to reduce risk.

After noticing that the millions of employees who have been granted equity compensation by their employer/company and their advisers have little understanding of the value that these employees have, the risks of losing that…


Added by John Olagues on October 15, 2012 at 1:41pm — No Comments

What is Risk Culture Building?

To start the process of Risk Culture Building, an organisation first needs to get an accurate picture of the current level of risk culture maturity in the organisation. Various attempts have been made to do this and generally most revert to some kind of questionnaire or checklist approach linked to a scoring sheet that is eventually tabulated to quantify an overall score which is linked to a perceived level of maturity. In some cases organisations call in consultants who use an…


Added by Risk Culture Builder on October 13, 2012 at 2:09pm — No Comments


In their new book Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage (2011), McKinsey senior partners Scott Keller and Colin Price make some interesting observations about organisational transformation and the achievement of excellence.

Leaders wanting to „beat the odds‟ must find answers to questions related to:

  • Dramatically (and quickly) improving the organisation‟s performance
  • Avoiding the pitfalls of transforming an…

Added by Dean Myburgh on October 13, 2012 at 12:00pm — No Comments

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