Cutting Edge introduction: Sifis and wrong-way risk

Wrong-way risk is a bad enough headache at the best of times. But what if your counterparty is systemically important, so its default affects all your other exposures? Laurie Carver introduces this month’s technical articles

Stock market performance

Much has been written about how to solve the problem of companies that are too big to fail, but with the detail of recovery and resolution plans still foggy, the policy focus to date has been on trying to make failure less likely: tougher capital requirements, maximum leverage ratios, and ring-fencing investment banks away from retail, for example. Perhaps the most striking action so far, though, is the creation by US regulators of a list of systemically important financial institutions (Sifis)

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The new rules of market risk management

Amid 2020’s Covid-19-related market turmoil – with volatility and value-at-risk (VAR) measures soaring – some of the world’s largest investment banks took advantage of the extraordinary conditions to notch up record trading revenues. In a recent…

ETF strategies to manage market volatility

Money managers and institutional investors are re-evaluating investment strategies in the face of rapidly shifting market conditions. Consequently, selective genres of exchange-traded funds (ETFs) are seeing robust growth in assets. Hong Kong Exchanges…

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