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Prediction markets can be a canary in the coal mine
Prices of contracts on the likes of Polymarket can act as signals for risk management and hedging, says risk expert
AI risk management and the shift to capability control
By reframing validation, banks can align innovation with regulatory demands and maintain robust risk discipline, argues risk manager
Tokenised commodities could help oil the machine
Shifting physical assets onto the blockchain eases collateral frictions, argues crypto expert
In the age of GenAI, why do we still need good models?
Jean-Philippe Bouchaud says models can guide artificial intelligence through regime shifts and away from overfitting
When trading speed outruns governance: the split-second control gap
A new form of light-driven electronics could be the next risk in market infrastructure, explains derivatives expert
What futures and options say about the cost of war
Spot prices reveal major disruption, futures indicate this will pass, options imply ongoing instability
For collateral, can TINA become TIA?
US Treasuries’ dominance as collateral in repo and derivatives is no longer set in stone, argues economist
Op risk data: HK gets tough on takeover in $200m takedown
Also: Bank staff steal state funds in India; Vanguard settles US net zero lawsuit. Data by ORX News
Beyond epicycles: models must describe markets, not just fit them
Modelling needs to embrace complexity in volatility patterns, says Jean-Philippe Bouchaud
FRTB internal models: quo vadis?
Two risk experts explore how to adjust the FRTB framework to promote internal model usage
Podcast: Gordon Lee on how junior quants can go from newbie to MVP
Prioritising tasks and setting boundaries are key to career progression, says BNY’s head quant
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
Markets never forget: the lasting impression of square-root impact
Jean-Philippe Bouchaud argues trade flows have a large and long-term effect on asset prices
Podcast: Pietro Rossi on credit ratings and volatility models
Stochastic approaches and calibration speed improve established models in credit and equity
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
Beyond the hype, tokenisation can fix the pipework
Blockchain tech offers slicker and cheaper ops for illiquid assets, explains digital expert
Rethinking model validation for GenAI governance
A US model risk leader outlines how banks can recalibrate existing supervisory standards
Malkiel’s monkeys: a better benchmark for manager skill
A well-known experiment points to an alternative way to assess stock-picker performance, say iM Global Partner’s Luc Dumontier and Joan Serfaty
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