Rowe on Risk Management
Rowe on Risk: Thought Leadership for Risk Managers
Crossing the chasm
Existing risk management information systems proved too fragmented and cumbersome to meet decision-makers’ requirements in the crisis. David Rowe argues that a major reappraisal is required.
Risk Magazine, March 2010
Hammers and nails
Excess regard for the techniques we know can lead to these methods being misapplied. Risk managers too often fall into this trap, argues David Rowe.
Risk Magazine, February 2010
Revenge of the economists
Having left full-time practice as a business economist more than two decades ago,David Rowe argues that the profession is poised for a resurgence.
Risk Magazine, January 2010
Twenty-first century supervision
Much of the regulation governing banks was developed in the last century. But it is time to stop trying to supervise twenty-first century financial institutions with twentieth century oversight tools, argues David Rowe
Risk Magazine, December 2009
Let small fires burn
The remarkable stability of the past two decades sowed the seeds of the current crisis. In future, monetary authorities will have to be more aggressive about removing the punch bowl when the party gets interesting, argues David Rowe
Risk Magazine, November 2009
Beyond comparative statics
David Rowe says it is time to extend stress testing to include more than just analysing the immediate impact of selected extreme events.
Risk Magazine, October 2009
Financial Network Risk
Both macroeconomics and financial theory have failed to deal adequately with systemic risk. However, other disciplines have much to teach us about the stability and fragility of complex dynamic systems, argues David Rowe.
Risk Magazine, September 2009
Flying blind
Despite including some useful proposals, the Obama administration’s regulatory reform initiative ignores a crucial issue, argues David Rowe.
Risk Magazine, August 2009
Fostering Opacity
‘Too-big-to-fail’ is not just a moral hazard problem, it positively fosters dangerous opacity.
Risk Magazine, July 2009
Markets are not magic
Despite their pervasive contributions to economic growth and efficiency, it is important to remember markets are not magic when transparency fails, argues David Rowe.
Risk Magazine, June 2009
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.
Risk Magazine, May 2009
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 secondorder uncertainty, argues David Rowe.
Risk Magazine, April 2009
To VaR or not to VaR?
Value-at-Risk (VaR) is appropriate and effective for its proper purpose - but it addresses only one of the two key challenges of financial risk management, argues David Rowe.
Insurance, Risk and Capital Magazine, March 2009
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 secondorder uncertainty, argues David Rowe.
Risk Magazine, April 2009
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.
Risk Magazine, March 2009
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.
Risk Magazine, February 2009
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.
Risk Magazine, January 2009
Dangerous momentum
All too often, we extrapolate tomorrow based on the momentum of today’s trends. But we would do well to adopt our primitive fear of physical momentum when assessing the prospects for financial markets, argues David Rowe
Risk Magazine, December 2008
Macrofinancial risk
A valuable synthesis of financial theory and macroeconomics appears to be emerging. This could enrich both areas, says David Rowe.
Risk Magazine, November 2008
Time for action
Back-office processing has long been the neglected stepchild of the derivatives business. But improved technology and growing systemic risk mean the time is ripe for supervisors to demand T+0 reconciliation, argues David Rowe.
Risk Magazine, October 2008
Towards T+0 reconciliation
The Counterparty Risk Management Policy Group’s third major policy statement appeared in early August – and it presents surprisingly radical demands, says David Rowe.
The meltdown in subprime collateralised debt obligations will affect financial markets for years. One likely result will be a renewed market willingness to reward sound credit underwriting – and therein lies a valuable business opportunity, argues David Rowe.
Risk Magazine, August 2008
Required reading
Over the past year, we have witnessed a unique experiment in what makes financial risk management effective. A succinct supervisory summary of what we have learned should be required reading for all interested parties, argues David Rowe.
In the same way credit risk managers used to question how a loan would be repaid if the primary means of payment were to fail, so banks ought to ask if there is another way to value structured credit investments if market liquidity were to dry up, argues David Rowe.
Are bulge-bracket investment banks really too big to be allowed to fail? Despite the upheavals such a failure would cause, the consequences may have been overblown, argues David Rowe.
Risk Magazine, May 2008