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What the Great Wall of China can teach us about Vendor Risk Management

A vendor risk management approach is all about creating centralized standards that transcend business silos, which is very different from the approach taken in traditional vendor management software. Vendor management needs tools with a risk-based approach to overcome their difficulty of objectively putting the vendor compliance pieces together across legal, purchasing , security reviews, and accounts payable silos for contrac

Properly stress testing measures of risk is a complicated activity that few companies have done well. In this blog we take a look at a complete framework for stress testing.

The spreadsheet map can be downloaded from this [LNK]

TUESDAY, MARCH 12, 2013

I recently read an interesting article in my son’s school’s newsletter.  It was a teacher of 28 years’ experience who for the first time in his career had another teacher sit in on a lesson with the purpose of self-improvement via a collaborative approach.  In his words:

"So, after 28 years in the wilderness, I took the plunge this week and welcomed a colleague into the protected walls of my classroom. My colleague, many years younger, technologically savvy, and very cool, quietly sat in the back

Bank Operational Risk

Banks and the financial regulatory world have changed significantly since I started consulting and training on the Basel accords ten years ago. Unfortunately, the neglect of operational risk remains the same.   

http://www.americanbanker.com/bankthink/bank-oprisk-ignored-more-than-a-bridesmaid-1056970-1.html?zkPrintable=1&nopagination=1

All information technology essentially offers an abstraction from an underlying reality, enabling that reality to be understood in simpler, more human centric and hopefully better ways. Some abstractions are good; the early GUI notion of “documents”, “windows” and the “desktop” allowed early PC users to interact with a strange new tool.  Some abstractions are simply bad and just confuse or get in the way (Microsoft Bob is a personal favourite)

Some abstractions such as Google’s search box are so

With ESMA’s (European Securities and Markets Authority) regulatory technical standards (RTS) codifying the European Market Infrastructure Regulation (EMIR) into an applicable set of rules entering into force on 15 March 2013, the implementation timeline for EMIR has now become much clearer.

The CCP registration process
Under EMIR CCPs apply for authorisation with ESMA to clear under EMIR. It is expected that this will happen sooner rather than later. CCPs will have the required paperwork ready to

Risk management is not about absolutes, it is about using a consistent analysis framework for balancing risk and cost on a common basis across the enterprise. Yesterday's announcement by the Transportation Security Administration (TSA) of their adoption of a risk-based approach is a long awaited practical application of enterprise risk management to security.

As April 25, 2013, the TSA will allow small pocketknives and an array of sporting equipment -- banned from aircraft cabins in the wake of t

A new renaissance in risk management

Social media sites have become a hot bed for thought leadership on a range of topics including risk, audit and compliance.  The article, "A new renaissance in risk management", captures the essence of those discussions and walks the reader through the future state of risk management.

This is an engaging article on the evolution of risk management and gives the reader insights into advances in risk practice.

Recently I read a comment in a LinkedIn Group that stated Chief Risk Officers should be given more authority in order to enforce sound risk management practices.  This made me raise my pen.

The notion of authority for a CRO worries me a bit along the lines that the risk management function and internal audit should be separated. 

I am more of the school that CROs sell benefits, facilitate better practices and influence good decision-making as broadly as they are able while the assurance function (

A question from a client today kind of goes like this:

"Is it possible to plot three types of risk variables in one chart and if so, what kind of risk chart could we use to achieve this goal?"

This is an interesting query for sure and risk charting is an area of risk management which is fascinating but can be quite complex. There is certainly more than one answer to such a question but today we'll take a look at Polar Charts as a solution.

More information on the Polar Plot can be found by [ clicki

A great TED video, this one by Ernesto Sirolli who tried a different approach (listening) to aid small rural and 3rd world communities, inspired this month's musings.

Those of us interested in EU risk regulation may be interested in the Action Plan that the European Risk Forum (ERF) issued a couple of months ago. The ERF Action Plan builds on and integrates the Commission Smart Regulation agenda, covering issues such as the EU Law on Administrative Procedures; public consultation, impact assessment and regulatory benefits; the role of the Commission’s Chief Scientific Advisor; and the application of the precautionary principle. 

The ERF is a think-tank committ

This is your opportunity to see the World Risk and Insurance News reports you may have missed:

• As insurers were praised for handling claims from Hurricane Sandy, banks were blamed for holding up payments to victims. (http://bit.ly/YLadOp)
• U.S. employers are revealing strategies to avoid the increased costs of employee health insurance under Obamacare. (http://bit.ly/121PsUU)
• Dr. MaryRose Reaston from Emerge Diagnostics discussed the consequences of the Mandatory Reporting Act on workers comp claims

Financial institutions have to optimize ‘Risk – Return’ and diversify their portfolio. The next presentation of a study illustrates the power of Gold as one of the best asset classes to optimize ‘Risk – Return’ in a given portfolio.

Just widen your knowledge about monetary gold by examining the next presentation I gave on June 19 2012 as a 'Johan de Witt Lecture' before 60 in gold interested actuaries of the Dutch Actuarial Association (Actuarieel Genootschap, AG).

The Dutch Actuarial Associat

Perennial mystery of understanding Trading Markets continues to this date. Does forecasting work?

Yes, forecasting works, as can be seen just at a glance, from the attached ppt file covering period of 2009-2012 for Gold, Crude Oil, EUR/USD, GBP/USD and AUD/USD.

Much higher no. of forecasts which have come true (in blue boxes) as compared to failed forecasts in red colored boxes proves that it is possible to understand market movements to a great accuracy.

Linkedin%20TrackRecord%20RahulC.ppt

Comments

Show us your best presentations or any other work, perhaps a publication by posting a new blog or a discussion and attaching your document.

The best presentation will receive the GRC award and the author will be given our Media Pass to  attend one of many Risk Conferences we are partnering with.

p.s.  Do not submit anything that you should keep confidential under any law. For example, do not submit information subject to a non-disclosure agreement, any inside information, or any proprietary or

BREAKING NEWS: Reed Hastings, the CEO of Netflix an active Facebook user commonly posts about the success of Netflix, often thanking users of the service for their loyal support, which sounds like the first line from a book on how to correctly promote a product using social media. But Hastings may have become a little too comfortable sharing certain aspects of the company’s information. In July of this year, he posted to his 240,000+ Facebook subscribers that “Netflix monthly viewing exceeded 1