Opinion/Risk management

Can the centre hold?

Despite the inevitability of tighter and more intrusive regulation, David Rowe argues this alone will not prevent future financial crises as long as 'too big to fail' remains an issue

Second-order uncertainty

The financial crisis has drummed home the dangers of basing analysis on unreliable data. Despite its amorphous character, risk managers must begin to increase their focus on second-order uncertainty, argues David Rowe

The big picture

Regulators are looking at how best to improve the measuring of risk, but Peter Schild argues the industry should focus on improving governance practices and be considering people and processes across the entire enterprise

From alpha to omega

The standard measures of credit risk do not efficiently capture the possible distribution of losses on a portfolio. But the Omega function may provide a solution for investors. Gene Yeboah

Systemic risk capital

We have seen what can happen when the size of financial institutions rivals - or even surpasses - that of their home countries. It may be time to limit the size of institutions through imposition of systemic risk capital requirements, argues David Rowe

Time to take stock

Plenty of pressure will be put on financial institutions to strengthen risk management processes in the wake of the financial crisis. However, firms might be better served focusing on getting the basics right, rather than necessarily doing more, argues…

Legal Spotlight

The ECB has set minimum standards that ABS must meet if issuers are to use the securities as repo-eligible funding. Angus Duncan assesses the impact of these new rules on existing ABS

The danger of two cultures

A 50-year-old essay on the failure of communication between scientists and literary intellectuals might offer lessons for the future of modern finance, argues David Rowe

Why Basel's not faulty

The tenets of the Basel II Capital Accord are fundamentally sound; it's the methods that the banks are using to implement them that are not so sound

Corrosive feedback

Innovations create their own feedback loops, and many of these are dangerous. Risk managers need to pay greater attention to such effects in the future, argues David Rowe

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