Opinion/Risk management
What futures and options say about the cost of war
Spot prices reveal major disruption, futures indicate this will pass, options imply ongoing instability
The loneliness of the model risk manager
Boards may see them as a drag on innovation; risk functions need to show they embrace efficiency
Italy’s spread problem is not (always) a credit story
Occasional doubts over Italy’s role in the monetary union adds political risk premium, argues economist
Op risk data: Kaiser will helm half-billion-dollar payout for faking illness
Also: Loan collusion clobbers South Korean banks; AML fails at Saxo Bank and Santander. Data by ORX News
Rethinking model validation for GenAI governance
A US model risk leader outlines how banks can recalibrate existing supervisory standards
The state of IMA: great expectations meet reality
Latest trading book rules overhaul internal models approach, but most banks are opting out. Two risk experts explore why
How geopolitical risk turned into a systemic stress test
Conflict over resources is reshaping markets in a way that goes beyond occasional risk premia
Op risk data: FIS pays the price for Worldpay synergy slip-up
Also: Liberty Mutual rings up record age bias case; Nationwide’s fraud failings. Data by ORX News
Allocating financing costs: centralised vs decentralised treasury
Centralisation can boost efficiency when coupled with an effective pricing and attribution framework
Collateral velocity is disappearing behind a digital curtain
Dealers may welcome digital-era rewiring to free up collateral movement, but tokenisation will obscure metrics
Responsible AI is about payoffs as much as principles
How one firm cut loan processing times and improved fraud detection without compromising on governance
Op risk data: Low latency, high cost for NSE
Also: Brahmbhatt fraud hits BlackRock, JP Morgan slow to shop dubious deals. Data by ORX News
NMRF framework: does it satisfy the ‘use test’?
Non-modellable risk factors affect risk sensitivity and face practical and calibration difficulties, argue two risk experts
Op risk data: Ghost of Madoff still haunts HSBC
Also: Giant loan frauds hit three global banks, and AWS outage casts a cloud. Data by ORX News
Op risk data: For Yes Bank, no mercy over insider fraud
Also: Cracking Brazil’s Pix hacks, Macquarie fund fumble, and taxing time for Crédit Agricole. Data by ORX News
When AI models malfunction, address the problem not the math
Governance of artificial intelligence models should focus on actionable outcomes rather than interpretability, argues former chief regulator
Op risk data: 1MDB scandal still haunts Wall Street
Also: Woodford in hot water, Salesforce voice phishing hooks multiple firms. Data by ORX News
Op risk data: Santander takes hefty historic hit over PPI mis-selling
Also: Brazil’s cyber screw-up, Barclays’ AML mishap, and MAS metes out more AML fines. Data by ORX News
The AI bot that left the garage
Senior operational risk exec explains how hidden third-party feature could lead to systemic risk
Libor appeals leave future misconduct cases Hayes-y
UK authorities must develop a more effective framework for punishing bad bankers
Was a big US bank close to collapse in 2023?
PNC’s Bill Demchak says it was. And the data suggests he was talking about BofA