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Greenspan defends Fed’s role in tech bubble

The US Federal Reserve’s chairman, Alan Greenspan, claimed that it is far from obvious that a bubble, even if identified early, can be pre-empted by a central bank without inducing a substantial contraction in the economy, but conceded that better models…

Euronext Amsterdam hit by more technical problems

Euronext Amsterdam, the Dutch arm of the pan-European cash and derivatives exchange, halted derivatives trading for three and a half hours today due to a network problem. A Euronext spokesman was not able to elaborate on the matter, although he said all…

EnergyClear hires senior risk officer

EnergyClear Corporation (ECC) has hired Holly Arney as senior vice-president of risk management. ECC, a Houston-based, not-for-profit, industry-owned and sponsored clearing house, aims to provide comparison, netting and settlement of over-the-counter…

Component proponents

Principal component analysis is a widely used technique in finance but can be problematic when different data sets are grouped together. Christophe Pérignon and Christophe Villa show how to resolve this problem using a technique from biology called…

Correlation and credit risk

Active development of full credit portfolio modelling continues apace, even though it is not recognised in the proposed Basel II framework. An important issue is the relationship between probability of default and loss-given default. In this last of four…

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