Risk Research Report

Risk Research Report is released on a monthly basis and covers a broad range of risk related issues specific to the investment banking industry. Risk Research Report will be of great value to you if you:

Have a series of specific and well-defined questions
Need a quick turnaround of findings
Want to keep abreast of the "hot issues" in the industry on an on-going basis

Several options for Risk Research Report annual subscription are available ranging from contracts with a minimum of 3 and a maximum of 12 topics commissioned by you.

Regardless of the subscription option you pick (e.g. 3, 6 or 12 topics of your choice to be researched), you will receive 12 issues of the Risk Research Report with the collection of topic commissioned by all the subscribers.

Country Risk Organisation for Distressed Eurozone Countries

Elevated country risk has historically been associated with developing economies. The 2008 financial crisis has, nevertheless, exposed the vulnerability of many eurozone economies and, hence, a great deal of attention has been paid to the sovereign debt crisis in Europe. Greece, Italy, Ireland, Portugaland Spain (GIIPS) have found themselves increasingly mired in the distressing consequences of the negative global economic climate. With increasing uncertainty about the future of the periphery of the European Union, financial institutions are now looking to redesign their country risk framework by devoting increasing resources to the country risk analysis of distressed industrialised countries.

Credit Risk Stress Testing

Stress testing has become the primary indicator of a bank’s ability to withstand tail events and maintain sufficient levels of capital at all times. Although banks generally do acknowledge the importance of stress testing, the stress testing frameworks, in many cases, are still immature. One reason for this is the difficulty gauging the impact of macroeconomic shocks on risk factors in sufficient detail. This is especially true within credit risk, given that credit events normally gestate over a long period of time and their effects can be felt for similarly extended periods.

Forward-looking Analysis of Credit Risk

In the aftermath of the events of the past three years it has emerged that the Early Warning Indicators (EWIs) which were employed by the banking industry were either insufficiently robust or were ignored by banks. One of the key elements of the post-crisis reform of the banking industry, both from within and externally, has been the implementation of more extensive and stringent systems to analyse and mitigate the various forms of risk.

Over-regulation in the Financial Services Industry

Although there is an understanding amongstindustry practitioners that regulators needed to act quickly and firmly, there is a perception that regulators have attempted too much in too little time.Essentially, it is believed by some that under pressure to act, regulators have made a series of proposals without fully understanding the implications these will have on theindustry and on the wider economy. There is absolutely no doubt that reform is needed, but regulators must ensure that they are finding the correct balance between protecting the taxpayer and allowing an efficient market to prosper.

The Three Lines of Defence Model

Financial crises always reveal glaring shortcomings in the prevailing risk governance framework in the banking industry. Nowadays, regulatory authorities and internal stakeholders at banks are scrutinising these internal governance frameworks with renewed firmness. Compliance with their expectations necessitates the clear delineation of all governance policies, so that individual departments remain cognisant of their roles. In this regard, the 3 Lines of Defence (3 LOD) approach is particularly appealing due to its uncontested simplicity and the way it very neatly ascribes distinct responsibilities to vital organisational functions.

Data Centre Strategy

Data centres have grown tremendously in the past decade, both in storage capacity and number. As banks deal with increasing volumes of data, challenges are arising, particularly around location considerations, cost reduction requirements and, not least, increased pressure to be environmentally-conscious. Moreover, the new regulatory framework requires banks to retain unprecedented levels of data for reporting to supervisory bodies, which significantly raises data storage requirements.