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Op risk data: Goldman 1MDB settlement swells 2020 loss tally
Also: Deutsche fined over Epstein KYC failings; collateral fraud in focus. Data by ORX News
Moonshots shelved: banks spend on home-working tech
Dealers made success of remote working switch – now they’re investing in its future, and pausing grander ambitions
Funds turn to stress-testing in fast-forward and reverse
Buy-side risk survey: Covid-19 is changing the way investors think about stress tests
Latest
Quotes
An organisation might have [the expectation that] X% of people are in the office 9am-5pm, [and that their activity] would come from trusted internet protocols, and so forth. Post-Covid, all bets are off. There are people working extended hours – maybe into the night. They are not coming from trusted IPs.
The forcible shift to remote working has made it far more difficult for bank cyber surveillance teams to monitor data for suspicious or unusual activity, says Rowland Johnson, director at CREST.
A lot of regulation tends to respond to the last crisis, and then envisages that the next crisis will somewhat follow it. And regulators probably envisaged a little bit more of a slow-burn situation [than Covid-19]. Economies generally don’t just collapse 10% in a quarter.
Stuart Lewis, Deutsche's veteran CRO, discusses the difficulty of factoring Covid-19 into loan-loss modelling under IFRS 9
If the Fed is using some of these legal settlements we had back in the day as a source of ‘noninterest expense’, my argument would be we’re no longer in those lines of business. We think firms who simplified their business and changed their model are being disadvantaged.
A senior capital manager at a large US bank has some disputations on the Fed's way of stressing his firm's op risk exposures
Editor's Choice
Stuart Lewis, Deutsche’s survivor, confronts Covid-19
CRO talks loan reserves, VAR breaches, and the lessons of a lurid past
Big Figure
Continental drift
A survey of more than 300 Risk.net readers, carried out in late March, highlights the starkly different realities that respondents in different parts of the globe expect to be living with while the pandemic lasts. Asked how many weeks it would be until the majority of schools, businesses and other places of work are “functioning normally” in their own region, expectations were wildly different. And viewed regionally, a clear split on lockdown expectations emerges between respondents in the US and Europe versus those in Asia-Pacific and the rest of the world.
Read the full article7 days in 60 seconds
Covid liquidity, block trades and Fed op risk
The week on Risk.net, August 1-7, 2020
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The unintended impact of collateral on financial stability
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Our Take
Clearing banks show they’ve learned lessons of the past
Don’t let a good crisis go to waste