Opinion/Risk management
Why a hybrid approach works best for AI in credit risk modelling
AI helps models look beyond quarterly reports, but CRO says governance curtails full automation
What happens when AI gets good at your risk management job?
Risk executive Alex Golbin asks how to build a valuable career in risk as agentic AI takes on more analysis
Why AI agents are like staff you can’t trust
Uncertainty implicit in GenAI systems means risk managers have to take a more adversarial approach
Op risk data: KKR crushes antitrust fine record over pre-merger filing fails
Also: Dealers pay up for Mexican bond-rigging scandal; missing AML checks at UBS. Data by ORX News
The ECB’s geopolitical stress test needs a price
Only a market can say how much it should cost to insure against losses from a geopolitical risk event, and none exists, argues academic
Op risk data: Japanese restaurant payments firm swallows $700m loss
Also: Bank of Baroda fraud filing, Wells’ Ponzi woes, and Swedbank’s Panama Papers payout. Data by ORX News
Private credit risk doesn’t have to be systemic to be serious
Risk management leader outlines three cracks in the consensus that risk in the private credit sector is contained
Perpetual futures: when expiry disappears, governance is key
Perps solve the futures roll problem, but run market-structure and regulatory risks, warns Vishal Gupta
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
Don’t mind the gap risk: regulatory treatment of credit repacks
Gap risk in repackaging is not a credit valuation adjustment for Basel III capital purposes, argues senior quant Andrey Chirikhin
Op risk data: HSBC hit with $400m external fraud loss
Also: China’s unlicensed trading clampdown; SocGen’s insurance mis-selling woes. Data by ORX News
The SaaSpocalypse shows private markets need risk models
Investors have little idea how bad the losses in private credit are going to be
G-Sib capital surcharge: how indexing and averaging alter incentives
Capital risk strategist anticipates Basel III endgame impact on US big-bank behaviour
Op risk data: Cyber hacks shake crypto protocols
Also: JP Morgan fined over investor losses; Symetra’s Methodist pensions mess. Data by ORX News
Prediction markets can be a canary in the coal mine
Prices of contracts on the likes of Polymarket can act as signals for risk management and hedging, says risk expert
How AI agents can join the dots for risk managers
Citi risk expert outlines agentic AI tool that would pull together structured and unstructured data on trading and lending approvals to create single, unified view of risk
Do banks still need to validate GenAI models?
Regulators carved out GenAI models from new risk guidance. Banks shouldn’t see this as a reason to stop validating them.
Op risk data: Corporate spies spell trouble for BBVA
Also: BofA buttonholed for alleged Epstein links; minority shareholders take a bite of Brookfield. Data by ORX News
AI risk management and the shift to capability control
By reframing validation, banks can align innovation with regulatory demands and maintain robust risk discipline, argues risk manager
Tokenised commodities could help oil the machine
Shifting physical assets onto the blockchain eases collateral frictions, argues crypto expert
When trading speed outruns governance: the split-second control gap
A new form of light-driven electronics could be the next risk in market infrastructure, explains derivatives expert