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Continuous verification holds key to keeping AI on track
Decision-by-decision testing will help users trust AI judgement calls
Op risk data: KKR crushes antitrust fine record over pre-merger filing fails
Also: Dealers pay up for Mexican bond-rigging scandal; missing AML checks at UBS. Data by ORX News
Treasury buyback risks a (collateral) chain reaction
Rebalancing of bond tenors could stretch collateral links to breaking point, argues economist
The ECB’s geopolitical stress test needs a price
Only a market can say how much it should cost to insure against losses from a geopolitical risk event, and none exists, argues academic
Podcast: Alexander Barzykin on modelling FX market-making
HSBC quant discusses adverse selection, price reading and internal liquidity management
Op risk data: Japanese restaurant payments firm swallows $700m loss
Also: Bank of Baroda fraud filing, Wells’ Ponzi woes, and Swedbank’s Panama Papers payout. Data by ORX News
Private credit risk doesn’t have to be systemic to be serious
Risk management leader outlines three cracks in the consensus that risk in the private credit sector is contained
Perpetual futures: when expiry disappears, governance is key
Perps solve the futures roll problem, but run market-structure and regulatory risks, warns Vishal Gupta
Op risk data: Pentwater pays up for taking Avis shares for a spin
Also: Romania’s Robor cop gets tough on benchmark rigging; Wamco’s cherry-picking squashed. Data by ORX News
EUR vs USD stablecoins is the wrong debate
Market structure and regulatory cohesion is at the centre of the stablecoin liquidity evolution, says Flow Traders’ digital assets head
AI compute has a governance problem
As exchanges move to launch compute futures, Vishal Gupta argues that the real test is not product innovation, but whether governance can keep pace
Why do prices jump? by Jean-Philippe Bouchaud
After years of investigation, we still aren’t sure, says Jean-Philippe Bouchaud
Don’t mind the gap risk: regulatory treatment of credit repacks
Gap risk in repackaging is not a credit valuation adjustment for Basel III capital purposes, argues senior quant Andrey Chirikhin
Op risk data: HSBC hit with $400m external fraud loss
Also: China’s unlicensed trading clampdown; SocGen’s insurance mis-selling woes. Data by ORX News
Vinicius fortune: quantifying luck in the World Cup draw, by Julien Guyon
Julien Guyon explains how bias, variance and luck affect teams in this summer’s tournament – and explores wider relevance for portfolio managers
G-Sib capital surcharge: how indexing and averaging alter incentives
Capital risk strategist anticipates Basel III endgame impact on US big-bank behaviour
Podcast: Abi-Jaber and Li on a ‘sticky’ volatility problem
The pair discuss their model to jointly capture Vix, SPX and SSR
Markets perceive the future in very distorted ways, by Jean-Philippe Bouchaud
Discounting paradigms should adapt to be more realistic, says Jean-Philippe Bouchaud
Op risk data: Cyber hacks shake crypto protocols
Also: JP Morgan fined over investor losses; Symetra’s Methodist pensions mess. Data by ORX News
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
How AI agents can join the dots for risk managers
Citi risk expert outlines agentic AI tool that would pull together structured and unstructured data on trading and lending approvals to create single, unified view of risk