Risk magazine - July 2026
Articles in this issue
Fourth-trigger CDS market weighs going blind
Dealers see benefit of undisclosed, replenishable pools – but not everyone is convinced
Anthropic curbs and cost fears spur banks to shop around for AI
Risk Live: Banks increasingly wary of reliance on US models amid uncertain geopolitical environment and mounting costs
Managing AI models is reshaping three lines of defence, say banks
Risk Live: Model managers want seat at table during development, and expect first line to take charge of AI model testing
CFTC backs clearing exemption for risk reduction runs
CCP sources concerned about switch to bilateral trades, as other regulators also soften rules
US Basel III will provide reprieve for clearing, but no release
Worst excesses of original endgame proposal avoided, but increased capacity still seen as unlikely
MUFG builds compliance-ready Claude Code
Japanese bank says Anthropic’s ‘phenomenal’ coding and productivity tool bucks compliance guardrails, prompting creation of in-house alternative
People: NatWest gets new group CRO, JPM tunes up top team, and more
Latest job changes across the industry
Red alert: how Nasdaq’s Smarts became surveillance blind spot
Software that looks for shifty trades has been asleep on the job, affecting alerts for hundreds of products
US regulators throw banks a curveball on committed credit lines
New Basel III charge on undrawn facilities will hit largest banks in areas like fund finance and credit cards
ETF surge shows ‘worst-of’ autocalls have life in them yet
Assets in older structures have caught up with vol target versions that looked set to dominate
Floored: Basel III rethink upsets IRB dominance
Introduction of output floor means internal ratings’ popularity takes a hit, but isn’t quite out for the count
Autocall ETFs set to triple, with products tied to gold and rockets
New market’s rapid expansion includes both defensive and high-octane offerings
The evolution of operational risk scenario analysis
How structured scenario analysis paired with AI-enabled challenge can modernise banks’ op risk practices
MBS convexity hedging: back with a vengeance, or ghost story?
More bonds now sit with active hedgers but market is split on whether flows can move US rates again
Have CCPs got better at absorbing shocks?
Data suggests most CCPs weathered the Iran-war disruption, but shock frequency is starting to bite
Bowman shuns CECL. Friends say it just needs a little help
How far should FASB go in reforming credit-loss accounting rules?
EU wants equity market to boom, but dealers may go bust
Legislators want to rebalance scales back in favour of primary exchanges
At the deep end: FX HedgePool’s struggle to stay afloat
Lack of offsetting flow, tech bottlenecks and higher-than-expected costs weighed on start-up’s growth
Risk Technology Awards 2026: Real-time reality
Industry trying to improve on periodic risk reporting – but it’s not easy
Agentic AI set to drive end-to-end automation of MRM workflows
Risk Live: Validator role likely to shift towards oversight and expert judgement
CCP liquidity risk measures hit highs in Q1
LCH, HKEX, JSCC and OCC set payment obligation records
SEB model shifts nearly treble standardised RWAs
Baltic portfolio transfer lifts credit RWAs and shaves 16bp from CET1 ratio
CCP liquid resources pivot to secured commercial bank cash
Eurex, CME and ECC drive jump in reverse repo-linked liquidity buffers in Q1
Fed projects near-record CRE losses for US banks
Wells Fargo tops estimated losses as stress test scenario hits commercial property loans
Modelled RWAs at systemic banks undershoot standardised by $441bn
Wells Fargo and Bank of America have largest gap between internal and regulator-set models
Governing AI execution as institutional infrastructure
Drawn from discussions at a June 2026 AI governance roundtable in New York, convened in collaboration with Cisco
The fundamental representation of pricing adjustments
A unified representation of derivative pricing adjustments is presented
Tailoring tails within the mixture model framework
Introducing a data generator mixing Gaussian and Student-t distributions to capture fat tails
