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"Risk Dashboards should serve the stakeholder" | Advanced Risk Dashboards

Thursday, September 10, 2015

Emerging Markets Workplace Safety

When a typical person from the developed world asks me about risk management practices in the emerging markets, I have this sense they just don't quite grasp what we are dealing with much of the time as risk managers. Over the years I have amassed some of the most incredible and unbelievable stories of dysfunction, yet ... society kind of works it all out pieced together by a thread. Much of the madness that goes on is unfathomable unless you see it with your own eyes, if you are looking out for it that is.

Just as a typical example; on my way to a risk management meeting of all things with a bank this morning, I was presented with a couple of images which starkly represent what I mean when I say risk management in the emerging markets has its challenges.

Friday, September 4, 2015

RMA Credit Risk Brown Bag

If you are in Singapore on the 17th of September and you work in the world of credit risk, this RMA credit risk program looks like an interesting presentation to attend.

Saturday, August 29, 2015

Assessing uncertainty is full of error

Our recent article on the risk matrix [LINK] is all fine but the concept of a risk matrix from the outset seems to embody much of what is wrong in risk management today, let me elaborate on all of this for a moment.

Saturday, August 22, 2015

Making A Risk Matrix Useful

A recent debate on the G31000 forum titled "Test your Risk Matrix" isn't the first time this contentious subject of Risk Matrices has been debated between practitioners and, I doubt it will be the last.  The use of a Risk Matrix, which we will explain in this blog article, is broadly popular among enterprise risk managers looking to report aggregated and enterprise-wide view of exposures that threaten their stakeholders.  Those that use risk software systems often find that the Risk Matrix comes installed as part of the package and I know some practitioners out there wouldn't procure a risk solution unless this type of report was available from the outset.

The Risk Matrix is a bit of FAIL though and it generally does not yield to the industry of risk management what it promises. Some seasoned risk analysts are so disgruntled with the tool that they choose to drop the whole reporting concept altogether.  That is all fine but it doesn't detract from the requirement that stakeholders are going to ask for a summarized view of their risks at some point in time and as it stands, many of them have become accustomed to seeing their world of risks in a matrix.

Disbanding the Risk Matrix to the rubbish bin doesn't seem a viable solution for avoiding its problems, unless something better comes along. So then, let's tackle its flaws and try to resolve them.

Friday, July 31, 2015

Australian and Canadian Bank Risk Culture Examined

An interesting study on the internal "Risk Governance Culture and Behaviour" of Australian and Canadian banks has recently been published by Elizabeth Sheedy and Barbara Griffin from the Faculty of Business and Economics at Macquarie University [LINK].

There are some curious insights to be found after surveying 22,145 employees of 222 various business units in six major banks headquartered across two countries and, I have plucked out some of these findings or perhaps their interpretations in this short blog posting.

Monday, June 29, 2015

The world has to leap for a second

It is official, the leap year is just not enough.  Analysts have known for a while but fearing the worse that the worlds rotation is slowing down, even though life is speeding up, scientists need to find a way to keep everything in sync. With all of this in mind, the time lords in charge of this planet's official time system have decided to add an extra second into the year.

This time tampering is referred to as the leap second.

This is not some tomfoolery on April the 1st, nor is it February the 30th but it is going to happen tomorrow on June 30th this year.

Friday, June 12, 2015

Can you really change the culture of banking?

George Osborn and Mark Carney are determined that the culture of banking as it has become accepted by the community at large, although deeply criticised over the years, can actually change.

Saturday, April 4, 2015

The importance of ISO 31000 in Germanwings

The article "The Germanwings crash and, the folly of risk analysis" shows to me at least, why the global risk standard of ISO 31000 is so vital to the people of this planet.

I will elaborate for a moment ...

Friday, March 27, 2015

Valuation Steps Part 2

A couple of days ago I published an article that mapped out the efforts required to perform a complete valuation of a new project or entity, and that article [LINK] seemed to have generated a lot of curiosity.  In this sequel to the Valuation Steps posting, we are going to take a slightly deeper look at how to identify specific the parameters which are needed to perform a Discounted Cash Flow valuation.

Wednesday, March 25, 2015

Valuation Steps

Product managers, corporate risk assessors, project managers, project financiers and many other types of business analysts often need to value uncertainty in their business strategies. In this small blog posting we take a look at the steps that would generally be followed for a typical sound valuation of 'corporate risk'.

Tuesday, March 24, 2015

Financially Evolving Big Pharma

Working with a wonderful group of industry experts at the huge Bio Pharma event in Singapore. Our presentation can be found at the end of this blog.

Wednesday, February 18, 2015

Pillar III Reports go through a makeover

The bank for International Settlements has been very busy over the last few months publishing amendments to both Basel II and Basel III, and it was only a matter of time before Pillar III was swung in for a similar maker over.

Monday, December 22, 2014

New Capital Calculations for Basel II Op Risk

It was to be expected that the proxy system for calculating Basel II operational risk capital was always dangerously simplified and consequently fraught with inaccuracies that would under or overestimate capital. A recent publication from the Bank for International settlements confirms what risk practitioners have feared for years and in this post, we take a look at the new recommendations that have been released from the Bank for International settlements.

Friday, December 19, 2014

Shape of Risk - When things break

In the first article on The Shape of Risk [LINK], we investigated why risk practitioners who simplify risk evaluations to a single point estimate will miss the shape of risk and we demonstrated this problem by comparing two very similar but independent risks side by side.

Our inaugural posting on the Shape of Risk series (I fair there might be a few chapters to come yet) attempted to keep the analysis lucid by only focusing on the comparable magnitude aspect of two risks and while the Shape of Risk part I is a nice bite size read, it leaves the frequency of a potential risk event untreated.

In this blog posting we'll address measurements around the likelihood aspect of risk accordingly and hopefully in the same straightforward manner.

Friday, December 12, 2014

The shape of risk

Risk practitioners who evaluate risk as a single number will miss the shape of uncertainty.

If risk is the effect of uncertainty on objectives, just as ISO 31000 defines it to be, we need to accept that there are many ways to describe this uncertainty.  In this short blog posting I am going to demonstrate that risk has shape and being able to dimension this shape will tell us a lot more about the underlying risks we have to manage. 

Thursday, November 20, 2014

What makes a good risk manager?

A recent debate in the G31000 risk forum [LINKon the old subject of what caused the Global Financial Crisis needs a fresh rethink in my opinion.

Tuesday, October 7, 2014

Is Risk Management a Science or an Art?

The discussion of whether Risk Management is really an art or a science has become a popular debating subject over the last few years as practitioners try to place it within a specific faculty of study.  Today we deliberate on this very subject again and on the G31000 forum [LINK].

Risk management can of course be an art or a science depending on one's point of view, taking features from both schools to become a craft.

Monday, September 29, 2014

Operational Risk Ten Stories

A decade ago, plus a couple of months, the banking community was thrown a new mandate from the Bank for International settlements titled Basel II. For the world of Basel this was the first time regulation had included operational risk as part of the capital regime program.

Ten years on, I have decided to take stock and pull together a presentation on what has worked for the banking community in operational risk management and what remains a stubborn challenge.

Sunday, September 28, 2014

Networked Risk Factors

Rieks Joosten has recently released an excellent paper and concept for assessing networked risks which has spawned on a debate for measuring such risks on the G31000 forum.

Friday, September 5, 2014

Funds Transfer Pricing Foundations

In this quick blog posting I am sharing the Funds Transfer Pricing presentation I delivered at the 7th Annual Risk and Liquidity Conference in Singapore.