Risk magazine
The road to Basel II
Basel II
Widening the net
Profile
Ageing gracefully
Sponsor Statement
Less is more
Hedge Fund Replication
Secondary thoughts
Secondary market
A model of self-regulation
Comment
Building protection
Structured products
Default and recovery correlations - a dynamic econometric approach
Integrating coherences between defaults and loss given default (LGD) is postulated by Basel II. If there is a positive correlation between the two, separate models for each lead to biased estimates for the LGD parameters, and the economic loss is…
Valuing bond index options in South Africa
Sponsored Statement
Sweet and sour
Crude oil
New head of debt market sales at RBS Securities
Royal Bank of Scotland Global Banking & Markets has named Shoji Taniguchi as head of debt market sales for RBS Securities Japan.
HSBC sacks US head
HSBC has replaced Bobby Mehta, its chief executive in North America, after it announced lending arrears from the US mortgage business would cost the bank more than $10.5 billion, 20% higher than analysts’ forecasts.
SocGen launches first insurance CDO
French investment bank Société Générale this week launched the first synthetic collateralised debt obligation (CDO) of insurance and reinsurance companies.
US derivatives volumes rocket on market fears
Several US derivatives exchanges broke their daily traded volume records by more than 20% during February 28.
Canabarro returns to Stanley
Eduardo Canabarro will return to Morgan Stanley on March 5 after a three-year stint at Lehman Brothers, where he was global head of quantitative risk management. In that role, he oversaw the firm’s market, credit and operational risk analytics, as well…
Variance swaps under no conditions
Conditional variance swaps are claims on realised variance that is accumulated when the underlying asset price stays within a certain range. Being highly sensitive to movements in both asset price and its variance, they require a very reliable model for…
Valuing inflation futures contracts
In recent years, futures contracts written on inflation (specifically, on the ratio of the consumer price index (CPI) level at two different times) have been introduced. Working within the Jarrow & Yildirim (2003) model, John Crosby derives formulas for…
The intrinsic currency valuation framework
Introducing the concept of the intrinsic value of a currency, Paul Doust shows how to use foreign exchange market volatilities to calculate the volatilities of intrinsic currency values and the correlations between them
Size constraints
Commercial real estate