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New Frontiers in Risk Management & ComplianceThis blog will discuss the latest developments & spot futuristic trends that would impact the Risk Mgmt practices and skills. March 12, 2010 Future of Stress Testing - UK FSA and EU CEBS lead the way !Earlier I had blogged about the pendulum shifting away from the light touch supervision mode to a much more prescriptive regulatory environment. The new stress testing guidelines in Europe seem to be good indication of the trend. With most stress testing models failing to reflect the current crisis, many regulators are reviewing the stress testing guidelines and methodology. Typically in most markets, the stress testing is performed at 3 levels; 1.Institution level Most of the changes focus on the first level of stress testing within institutions, but there is certainly thinking on other 2 aspects as well. Purely going by the headlines, the Risk Managers in Europe must be quite stressed by the ongoing consultations around stress testing regulatory mandates. Let us look at CEBS & FSA in this blog; Continue reading "Future of Stress Testing - UK FSA and EU CEBS lead the way !" Posted by Sai Sireesh at 06:26 AM | Comments (0) January 08, 2010 Risk 2010 - Trends to keep in viewHappy 2010 to readers. Many in Risk Mgmt profession welcome 2010 with a sigh of relief, considering the financial markets turmoil and the resulting broader economic impact in 2009. So what can we in the Risk Mgmt profession look forward to in 2010? Continue reading "Risk 2010 - Trends to keep in view" Posted by Sai Sireesh at 04:52 PM | Comments (1) December 24, 2009 The humbling rollar coaster ride for Risk in 2008-2009It has been a humbling roller coaster ride for Risk Management globally in the past one year. For some it has been plain scary to see the failures of much vaunted risk management capabilities, for some it has been life changing in terms of job losses and for some it has been just tremendous learning. I believe it has also been particularly humbling for all in the profession in many ways. Some of my thoughts from Hyderabad, India as I wind down the year 2009. Merry Xmas, happy holidays and happy 2010 to all of you! Continue reading "The humbling rollar coaster ride for Risk in 2008-2009" Posted by Sai Sireesh at 08:49 PM | Comments (0) October 08, 2009 Australian secret sauce for managing risk sprinkled with APRAs Meta Regulation !I was fortunate enough to have short work stints in Australia (both Sydney and Melbourne), a beautiful country with its free spirited fun loving sporty population. I continue to be amazed at the sophistication and depth of their financial markets. There is also a lot of cross pollination of global markets expertise, ideas and world class talent between London and Sydney. Their regulators RBA, ASIC, APRA and ACCC are amongst the most proactive and knowledgeable in the world. Australia s top 4 financial groups - Commonwealth Bank of Australia(CBA), WestPac, Australia New Zealand(ANZ), National Australia Bank(NAB) rank amongst the top banks globally. Despite the crisis all round in banks globally, all of these Australian institutions remain profitable, well capitalized and well managed. The Australian banking sectors profit margin is So what is Australias secret sauce? Continue reading "Australian secret sauce for managing risk sprinkled with APRAs Meta Regulation !" Posted by Sai Sireesh at 05:49 AM | Comments (3) September 10, 2009 The Spanish approach to Risk management !As a major European economy Spains banking sector has relatively fared well in the international financial crisis. Both Banco Bilbao Vizcaya Argentaria (BBVA) and Banco Santander (BS), amongst the largest banks in the world have done relatively well compared to their peers. Very few banks have needed capital infusion and government hand holding. Spanish banks have done quite well in past years fueled by a real estate boom. Of course as the real estate declines over the past two years and the economy is in recession, many banks do have heavy exposures to the real estate sector and are saddled with a rising rate of bad loans. The government is stepping up with a fund of up to euro90 billion (US$125.46 billion) to help banks restructure and cope with the effects of recession. Continue reading "The Spanish approach to Risk management !" Posted by Sai Sireesh at 10:25 PM | Comments (0) August 08, 2009 Risk Management & Regulatory frameworks - The Canadian Loonie WayI often refer to FSA, Fed Reserve, APRA, ECB, MAS in my blogs. During my ongoing research on next generation regulatory and supervision frameworks, I start to identify some of the leading economies where financial institutions managed their risks comparatively better. Canada, worlds second largest country by area is on the top of my list. In this blog I cover off some of the Risk management practices & the supervisory framework in Canada. A free spirited multi cultural country, C$1 and C$2 coins are referred fondly by its citizens as the loonie and twoonie respectively. The one dollar coin has a image of a Canadian Loon; the two dollar coin has an image of a polar bear.(thanks to Greg Keeling from BMO, Canada for his insights on the terms loonie & twoonie). OSFI (Office of the Superintendent of Financial Institution) or BSIF(Bureau du surintendent des institutions financieres Canada) supervises all the Canadian financial institutions. Some of the differentiating factors and broader learnings and best practices from Canada being: Continue reading "Risk Management & Regulatory frameworks - The Canadian Loonie Way" Posted by Sai Sireesh at 06:17 AM | Comments (3) July 14, 2009 Risk Career Series - 7 Traits & Habits for a Risk Management Career - Part 1I am starting this blog series in response to many requests for career advice and guidance that we all keep getting from time to time from young bright aspirants! Also when i started my blog i listed the below 10 Risk mgmt frontiers ideas, so next few blogs are going to be adressing the ideas not addressed so far. 1. Risk Visualization My thanks and sincere apologies to all of you who took time to write to me. To some I have responded already and I really wish I could respond to all of you individually on your interest to work in the Risk Mgmt area, but a more efficient way to respond would be via this PRMIA blog. Let me start by saying to all the young & old, inquisitive, brilliant minds out there, we need more of you in this dynamic and exciting profession. So please do keep flocking to the Risk profession. This is not a one off blog. I will keep posting regularly on this topic regularly. I also hope that this blog topic will evolve into a Risk Mgmt Career thread with lot of questions, and inputs from the more seasoned Risk mgmt gurus and experts from the industry, so we all get a much wider perspective on entry in the Risk mgmt profession. Perhaps we can evolve into an annual PRMIA Global Risk Mgmt Career webcast. Being involved in the selection process of the PRM candidate of the year for the last 2 years and looking at the caliber of candidates, it seems a logical extension of developing the Risk mgmt profession. Note: Certainly do not consider my thoughts as absolute truth as they are colored by my limited personal experiences. Do take them with a pinch of salt and beware of the extra mix of continental and asian spices thrown in. Continue reading "Risk Career Series - 7 Traits & Habits for a Risk Management Career - Part 1" Posted by Sai Sireesh at 08:33 PM | Comments (2) June 18, 2009 7 pillars of US Financial Regulatory reform & the European Systemic Risk Council - The new blueprintRisk & Compliance Managers, Private Equity(PE) firms, Hedge Funds, Credits firms and Consumers, in the USA and global financial markets are going to remember this week for a long time to come due to the epic changes in the financial regulation and supervision. I had blogged earlier about move to regulation from the light touch supervision. The latest US proposal on financial regulatory reform does skew towards tighter regulation. In the EU summit starting today, a tighter financial market regulation is being discussed with 2 extra mandates for EBC - a European Systemic Risk Council and a body to set standards for closer supervision of banks, insurers and other firms. The European Systemic Risk Council, is proposed to be chaired by the European Central Bank president but will include central banks and the EU Commission representation to look at broader interlinked systemic risk issues. The proposal is still evolving and subject to congress approval, but a quick summary of the 7 key areas and the possible impact on Regulatory Risk Management and compliance functions: Posted by Sai Sireesh at 03:14 PM | Comments (3) June 10, 2009 How does one manage Risk in Bad banks ?Recently we keep hearing new terms such as good bank, bad bank , toxic assets. Interesting times, as a bank and financial institution to me always denoted rock solid trustworthy entity.With many countries exploring bad banks concept in one way or the other, I wonder on the role that risk managers play in bad banks. Is it any different than the traditional role ? Continue reading "How does one manage Risk in Bad banks ?" Posted by Sai Sireesh at 06:39 PM | Comments (0) June 03, 2009 SEC tweets on twitter too - Digital Assets Risk Managment- Has its time come?Digital Assets Risk Mgmt as a key management priority? US President's 10-point Cybersecurity Action plan Blogs, Wikis, Twitter, Facebook, Linkedin, Secondlife - all start to become key component of the millenial generations activities at workplace and lifestyle. Its but natural that even regulatory bodies such as SEC and stock exchanges start to embrace twitter to boost their transparency and and outreach to the net savy investors. Continue reading "SEC tweets on twitter too - Digital Assets Risk Managment- Has its time come?" Posted by Sai Sireesh at 10:24 PM | Comments (0) May 19, 2009 Should IT be the second line of defense for Operational Risk function?As companies gear up to handle the ever increasing risk management and regulatory enviroment, a key aspect in recent times has been emergence of the Operational Risk and the role of IT in the implementation of the op risk initiatives. Continue reading "Should IT be the second line of defense for Operational Risk function?" Posted by Sai Sireesh at 04:53 PM | Comments (2) April 08, 2009 Liquidity Management - The future blueprintWith Liquidity management emerging as a key area of focus in the financial sector crisis, this article summarizes some of the key trends as to where the liquidity management practices are headed. I believe these will be epic changes in the one of the key pillars of risk management. Continue reading "Liquidity Management - The future blueprint" Posted by Sai Sireesh at 11:11 PM | Comments (3) February 14, 2009 Regulatory Oversight & Risk Mgmt impact - The way ahead !The ongoing global credit crisis and the systemic risk tsunami is definitely leading to an overhaul of the regulatory frameworks around the world. It remains to be seen if the pendulum will swing from the much touted Supervisory mode back to Regulation mode. It’s a devil and deep sea choice between light touch and heavy handedness. This article highlights some of the trends that I observe around the world around Regulatory oversight and possible impact for Risk management principles. Continue reading "Regulatory Oversight & Risk Mgmt impact - The way ahead !" Posted by Sai Sireesh at 12:35 AM | Comments (0) January 17, 2009 GRM- Global Risk Mgmt and Governments Risk Mgmt with a $5 trillion plus kittyWishing everyone a happy and safe new year! GRM - Global Risk Management or Governments Risk Management Continue reading "GRM- Global Risk Mgmt and Governments Risk Mgmt with a $5 trillion plus kitty" Posted by Sai Sireesh at 05:26 PM | Comments (2) September 08, 2008 Managing the $6 trillion systemic risk at the global iconic legends - Fannie Mae & Freddie MacFannie Mae (The Federal National Mortgage Association) and Freddie Mac(The Federal Home Loan Mortgage Corporation) - the twin iconic GSE (Govt. sponsored enterprises) institutions that own or guarantee more than $5-6 trillion of the total 12 trillion mortgages have always been the legendary pillars of the US mortgage industry but their span of influence and prestige spread much wider across the entire financial markets around the world. For sometime now, both the mortgage icons have been under tremendous pressure due to the sub prime, mortgage and housing crisis in the US market. Although they guarantee or own only half of the mortgage market, because the subprime mortgage crisis has caused almost all other lending sources to pull out of the market, they are responsible for more than 80% of new mortgages being made in 2008. There was fervent hope from many informed quarters that these prestigious GSE's would somehow weather the perfect storm and lend the much needed stability to the mortgage market. More so as many U.S. banks as well as foreign governments own stock or debt in the two giants, implying gigantic proportion of the systemic risk beyond the US housing market. But this week a new chapter in managing the gigantic systemic risk will be written via the US Treasury, Fed Reserve and the Federal Housing Finance Agency(FHFA) coordinated intervention at these 2 iconic firms. As of yesterday Sept 7th 2008, both firms are now under conservatorship of the FHFA.
Posted by Sai Sireesh at 04:31 AM | Comments (0) |
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