Conduct risk
Stuart Lewis, Deutsche’s survivor, confronts Covid-19
CRO talks loan reserves, VAR breaches, and the lessons of a lurid past
Covid capital, SA-CCR and problems with post-Libor protocol
The week on Risk.net, July 4-10, 2020
Lawmakers have to sort ‘tough legacy’ Libor products – survey
Challenges agreeing contract amendments and lack of term rates for the risk-free alternatives are also barriers to transition
An emergent taxonomy for operational risk: capturing the wisdom of crowds
In this paper, the author takes a data-driven approach and combines the individual active taxonomies of sixty large financial institutions (fifty-eight for construction and two for validation) to create a coherent new reference taxonomy: the ORX…
SOFR and credit spread – Not as simple as it seems
Chris Dias, principal and global Libor solution co-lead at KPMG, explores how the market will adjust as liquidity grows and why firms must resist the temptation to default to existing processes for determining credit spread and rethink the traditional…
Conduct risks stalk banks in Libor transition
As replacement rate concerns become more pressing, firms fear Libor lawsuits and regulatory wrath
Big banks worry small lenders could derail Libor switch
As UK regulator reiterates 2021 warning, dealers say Covid-19 is forcing smaller lenders to divert resources
Emergency Covid loans carry high mis-selling risk, banks fear
Rapid roll-out of government schemes raises legal fears over inequitable client treatment
A sea change – Driving awareness to confront climate risk
Amid a global push towards green policies, the reality of overhauling how industries worth trillions of dollars operate is causing concern. A forum of market participants and sponsors of this report discuss the levels of awareness of climate risk and its…
Top 10 operational risks for 2020
The biggest op risks for 2020, as chosen by industry practitioners
Top 10 op risks 2020: conduct risk
Root-and-branch reform of bank culture remains a work in progress
IT disruption chief concern in Top 10 Op Risks survey 2020
Risk managers cite data compromise, theft & fraud and third-party risk among other top worries
Break up big conduct risk losses to aid modelling, say quants
New approach delivers stable measure of conduct risk VAR, says senior op risk quant
EU banks failing on op risk and governance – ECB
Central bank raises concerns on board management, risk controls and data aggregation
Estimation of value-at-risk for conduct risk losses using pseudo-marginal Markov chain Monte Carlo
The authors propose a model for conduct risk losses, in which conduct risk losses are characterized by having a small number of extremely large losses (perhaps only one) with more numerous smaller losses.
NY Fed’s Stiroh: ‘More work to be done’ on bank culture
Supervision chief warns on new risks from machine learning bias
Industry-led op risk taxonomy launches
Scheme aims to complement Basel classifications, ease peer comparison
Risk oversight at Aussie banks under fire again
Asic criticises boards and management for immature oversight of op risks
Realising opportunities while managing conduct risk
As efforts to transition from Libor to risk-free rates ramp up, Maria Blanco and Nassim Daneshzadeh, partners in PwC’s US and UK financial services practices, discuss two critical and interconnected strategies that are front and centre for PwC clients
A behavioural lens could help manage human risk
Human decision-making needs careful watching. For that, behavioural science can help
FCA has active pipeline of misconduct investigations
As expansion of SMR to smaller firms looms, regulator says plenty of bankers are under scrutiny
Aussie regulator signals tougher misconduct stance
Asic warns it will use new powers to punish misconduct in wake of excoriating Royal Commission review
Debelle swings at ‘buyer beware’ disclosures in FX
“They don’t give you free licence to do whatever you want,” says new GFXC chair