Risk Management
Latest Risk Management
Red alert: how Nasdaq’s Smarts became surveillance blind spot
Widely used software that looks for suspicious trades has not been alerting its users, potentially resulting in market abuse going unnoticed. After problems were first spotted for products that trade at Eurex earlier this year, the issue has “grown horns”, according to one affected customer, with users notified of new problems on a weekly basis. One US bank believes it has been incorrectly monitoring up to 200 products, ranging from Vix futures to coffee options.
Banks have been trying to backtest and backfill, but they could be in hot water even if no abuse is found: market participants in many jurisdictions are required to monitor for manipulation, and experts warn that those firms – not their vendors – could be held accountable for any blind spots.
Model risk managers are being asked to do more with less
Risk Benchmarking study finds function being handed expanding AI workload, on flat resources
Banks are automating GenAI testing, but scope varies widely
Risk Benchmarking: LLM-as-judge offers model testing at scale, but few lenders use it to facilitate autonomous sign-off
Op risk data: Pentwater pays up for taking Avis shares for a spin
Also: Romania’s Robor cop gets tough on benchmark rigging; Wamco’s cherry-picking squashed. Data by ORX News
How US regulators could stop management driving Camels
Supporters flag disconnect from other indicators; critics fear early warnings will go unnoticed
Asian banks may need to step up Hormuz-related credit provisions
Regional banks were slow to respond in the first quarter, but the crisis isn’t going away quickly
Operational Risk Benchmarking
Banks insure against cyber risk, but rarely claim
Risk Benchmarking study finds big banks aggressively negotiating on cost of cover, and seeking offsets to Pillar 2 capital
Four in five banks use AI to manage op risks
Risk Benchmarking: Cyber risk use cases growing; governance and ROI doubts give some pause
Build, or buy: banks still don’t love their GRC vendors
Risk Benchmarking study finds a record number of firms reviewing tech provision for top op risks, amid touted wave of AI-led self-builds
On cyber risk, tech debt is big banks’ top challenge
Risk Benchmarking: Fragmented stacks make identifying vulnerabilities harder; manual workarounds increase human errors
Risk Quantum
Data insights, delivered daily
Risk Quantum finds insights in data. The service tracks the public disclosures of over 120 banks, funds, insurers, corporates, and central counterparties – as well as reports from prudential and markets regulators – in Asia, Europe and North America.
US banks add $75 billion of CRE as concentration risks recede
Portfolios grow at fastest pace in nearly three years, while exposure above regulatory thresholds drops
Artificial intelligence
AI autonomy may redefine risk management roles
Risk Live: Machine validation of autonomous processes may emerge “relatively soon”, EIF risk chief says
Treat AI models as would-be hackers, says quant
Risk Live: Models capable of “strategic deception” require different risk management, says former Risk.net quant of the year
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
EU banks welcome high-risk systems breather from delay in AI act
But chatbot transparency still applies from August, requiring deployers to disclose use to customers
Hard day’s night: Kalshi’s round-the-clock enforcement head
Robert DeNault wants market-leading tech to handle up to 40 insider trading cases at a time
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