Risk magazine - Jun 2025
Cover detail:
Yuen-Ching Lisa Ling
Who killed cock robin, acrylic on canvas
Articles in this issue
Brain drain at OCC raises concerns about US model supervision
Quant team cull will reduce capacity to validate bank models, but that could be part of the plan
US Basel III delay to 2026 seen as almost inevitable
Reprioritisation and leadership changes cast doubts on timing of new proposals
LCH plans Q4 launch for FCM-style clearing
UK clearing house will be first to offer Europe’s new agent model as Eurex faces tax hold-up
Hedge funds return to HKD carry trade after May stop-outs
Widened interest rate differentials spur investors to re-enter positions, but risks remain
Risk managers say second line needs to identify its value-added
Risk Live: Risk functions must see themselves as problem-solvers, but first line should share responsibility
Isda moves to fix outdated CDS obligations list
Updated process would allow for mass updates, reserving legal review for most complex challenges
Investment firms ready plans for US autocallable ETFs
Evergreen format would provide the long-term track record required by portfolio allocators
People: Rustad to head SwapClear, Kimmel exits Citadel, and more
Latest job changes across the industry
BoE takes subtle leverage snipe at CCP cross-margining
Margin offsets might increase risk, but could also encourage more central clearing
How to reform the NSFR… and why regulators may never get there
Ideas for updating funding rules after SVB include recalibration and concentration limits
CCAR at a turning point, but which way is forward?
Banks sniff an opportunity to push the Fed for more openness over stress test models – and seize capital benefits
Should the Fed mandate collateral pre-positioning at the discount window?
Supervisor wants banks to be ready to access central bank facilities, but formalising pre-positioning has some drawbacks
From fragmented signals to confident credit decisions
Credit Benchmark and Oliver Wyman explore how aggregated bank data and advanced analytics are helping risk teams make confident, forward-looking credit decisions
The IMA map: charting market risk capital under Basel 2.5
The current market risk framework refuses to be superseded. Risk.net dissects banks’ disclosures to explore how trading book capital requirements have evolved
Allocators try to stay strategic in a world turned upside down
Investors are revisiting long-held assumptions about how to allocate large pools of assets
Risk Technology Awards 2025: Tariff turmoil’s tech effects
Upheaval in US trade policy drove demands for more data, more simulations as supervisors pushed banks to plan for the worst
Op risk data: Rates bait and switch incurs Capital One punishment
Also: Crypto firms suffer cyber setbacks, Umpqua in Ponzi play, and QSuper premium palaver. Data by ORX News
Why AI-enhanced risk management is vital for open finance
In bank-fintech partnerships, AI can be both a source of operational risk and a solution to it
AI in capital markets: bridging predictive precision with generative possibility
Regulatory requirements, compliance demands and concerns over data quality and consistency are prompting firms to approach AI with renewed caution and clarity
CME suffers longest op failures in seven years
Outages totalled over 13 hours in 12-month period
CVA capital charges more than double at BPCE post-Basel III
French bank leads European trend of elevated capital requirements under new rules
US banks’ FX notionals hit record $66trn on forwards frenzy
JP Morgan leads record derivatives surge amid Q1 market volatility
Global OTC derivatives jump €72trn in 2024
Europe, UK, Canada and China hit record highs, while US banks pull back
Ice US incurs $644m hypothetical stress loss shortfall
Double-member default in worst-case scenario would have overwhelmed CCP’s default fund
Supervised similarity for high-yield bonds
Quantum cognition ML is used to identify tradable alternatives for high-yield corporate bonds
Simulation of Heston made simple
A new way to apply the classic stochastic volatility model is presented
Podcast: Villani and Musaelian on a quantum boost for machine learning
Classical methods struggle with highly dimensional problems. Quantum cognition takes a different approach, as hedge fund duo explain
