Advertisements

Tag Archive: Risk management


RISK is a four letter word and been fancied these days. Everyone knows about risk and every firm is accompanied bloghas best process, best standards, best people till the time an incident or big impact is not been made.

The recent example of fine imposed by the US authorities on various Investment banks like BNP PARIBAS SA, BANK OF AMERICA, RBS, HSBC, STAN CHARTED, ING, J.P. MORGAN are some of the examples of the above. Corporate are heavily investing in the compliance and in the risk management department but they forget to invest on the employees.

Risk management has become a key function in almost every large company, but all too frequently it makes an organization so risk-averse that initiative and innovation become paralyzed.  Continue reading

Advertisements

Zero Hedge is one of my favorite blog on the risk analysis and for the global events, the blog argues that we are living in the Golden blogAge of Central Bankers, and that wreaks havoc on the fundamental nature of market expectations data.

  • The VIX  (Volatility Index) is not a reliable measure of market complacency.
  • The wisdom of crowds is non-existent.
  • Fundamental risk/reward calculations for directional exposure to any security are problematic on anything other than a VERY long time horizon.
  • I’d rather be reactive and right in my portfolio than proactive and wrong.

The Golden Age of the Central Banker is a time for survivors, not heroes. And that’s the real moral of this story.

Let’s dig deep to understand the most basic question in risk management. Continue reading

If you are deployed in the Investment banking space front office, middle office or back office, you should have come across blogphrases such as “collateral liquidity crunch” and “collateral scarcity”, and new terms such as “collateral transformation” and the “collateral upgrade trade.

Came across an interesting paper on Collateral management sharing some of the highlights, need for collateral management, how we got there, some of the Best Practices to collateral.

The 2008 financial crisis and the role derivatives played in it compelled regulators to re-examine and reengineer the entire derivatives market structure. The disruption to the derivatives market is already underway, primarily as a consequence of behemoth regulations such as the Dodd-Frank Act (DFA), European Market Infrastructure Regulation (EMIR), Basel III and others. But new global regulations are not the only driver.  Continue reading

If you are deployed in the Investment banking space front office, middle office or back office, you should have come across phrasesblog such as “collateral liquidity crunch” and “collateral scarcity”, and new terms such as “collateral transformation” and the “collateral upgrade trade.

Came across an interesting paper on Collateral management sharing some of the highlights, need for collateral management, how we got there, some of the Best Practices to collateral.

The 2008 financial crisis and the role derivatives played in it compelled regulators to re-examine and reengineer the entire derivatives market structure. The disruption to the derivatives market is already underway, primarily as a consequence of behemoth regulations such as the Dodd-Frank Act (DFA), European Market Infrastructure Regulation (EMIR), Basel III and others. But new global regulations are not the only driver. Continue reading

Why Derivatives are so Hot

Recalling a chapter from Traders Guns and money Beautiful lies on sale side how derivatives are misinterpreted or mis-sold, It’s blog simple trying to figure out the hierarchy of the trading floor. There are Sales people – they lie to clients. Traders lie to sales and to risk managers. Risk managers ? they lie to people who run the place – a small correction they think they run the place. The people who run the place lie to shareholders and regulators 🙂

Few days back I did Derivatives derivatives so many, resembles outstanding derivatives with the top 5 banks of the world, here is some basic background for my non financial market friends about derivatives.  Continue reading

%d bloggers like this: