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Opinion

The white elephant of the trading book review

The Basel Committee’s fundamental review of the trading book raises some serious issues, but David Rowe argues its central proposed revision to the market risk capital regime is little more than a costly distraction

Resist the rise of the risk management machines

Overreliance on modern risk management systems, and metrics such as value-at-risk, can blind firms to tectonic structural market shifts. To help alleviate this problem, the use of human judgement and intervention is required, argues Vincent Kaminski

Trading OTC may be costlier than you think

Debate continues to rage about the merits of clearing, with some market observers arguing that the benefits of using central counterparties are outweighed by the precipitous costs involved. But such criticisms fail to take the full burden of over-the…

Why collateral research misses the point

There may be an aggregate collateral surplus, but pension funds and other firms that would face big margin calls in a rising-rate environment are not reassured

Yellen faces a logistical nightmare

The impending transition from Ben Bernanke to Janet Yellen at the US Federal Reserve is taking place at a particularly sensitive time, argues David Rowe – the new chair faces the logistical nightmare of unwinding a massive increase in the central bank’s…

Risk management should be more than just a decoration

Despite massive investment in human capital and technical resources, risk managers failed to warn about the dangers of toxic assets and excessive leverage in the run-up to the global financial crisis. Their lack of authority is partly to blame, writes…

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