Introduction

Diana Higgins

I wrote Portfolio Compression to help those colleagues that have to make decisions, that need to guide others or who are actually doing the work. They may be in an energy trading company, like myself, or they may be in a financial institution. Their task is to mitigate regulatory or other risks in their trading portfolios. Some of them may not be aware of a technique called portfolio compression that exists to help manage trading and regulatory risk.

Some readers may agree that one of the main challenges introduced by regulation has been to compel teams of colleagues from different backgrounds and departments to achieve results that, at least in the early years of regulation, are not even defined. Not surprisingly, the first questions that can be thrown at the leader in a compression meeting could be as open as “What is the process?”, “What is the next step?”, “What are we trying to achieve?”, “What is the question?” and “What is required from me?”, and many others that start with “how”, “when”, etc.

I learned about compressions when I “had to” for survival reasons in the middle of various defaults. However, as I got into the topic, I discovered that it was important to be