Risk: Where are financial institutions currently focusing their risk management efforts?
Paul Elflain: We are currently seeing all financial institutions undertaking a rigorous assessment of all their risks in business, including market, counterparty, credit, liquidity, legal and operational risk. Valuation risks associated with structured product and non-vanilla over-the-counter (OTC) derivatives are clearly going to be a big focus from here on, but we are also seeing firms placing immense focus on the reduction of counterparty risk. High-profile credit failures, such as that of Lehman Brothers and the economy of Iceland, coupled with the complexity of OTC instruments has meant that counterparty risk has become a daily concern for market participants.
More on Risk Management
New sanctions on specific companies could trigger CDSs and complicate settlement
Accounts shouldn't pretend valuations are exact - but how best to fix the problem?
Sponsored Q&A: Broadridge Investment Management Solutions
CME has been waiting seven months for its liquidity plans to be approved
Sign up for Risk.net email alerts
Nominated for two technology awards
Nominated for post trade technology award
Sponsored webinar: Collateral and counterparty tracking
Isda directors warn on fragmentation, access and liquidity - but expect problems to pass
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.