Ambit Capital and Liquidity Planing, Industry Insights
Basel II and the Sound of Moving Goal Posts
Article
US regulators thought only a few large international banks need conform to the sophisticated approaches of Basel II while the rest of the industry could stay with Basel I. Read how this position has changed.
Counterparty Credit Risk
Article
Bank awareness of CCR is rising fast as risk management standards improve and transaction volumes grow. Read about why this rise in awareness is good as long as banks approach CCR measurement in a sound way.
Do Fee Businesses Absorb Or Provide Risk Capital?
Article
Read about the need to allocate capital on fee-based businesses such as asset management, brokerage and mortgage production.
Fed Takes Pulse of Economic Capital Practices
Article
Read about how to roll RAROC out to the business and discover the practical applications.
How to Assess the Quality of Economic Capital Numbers Using a Simple Scorecard
Article
Read about how to assess the quality of a bank’s economic capital numbers by answering an economic capital cosmo quiz.
Is Historical Charge-off Volatility ‘Close Enough’?
Article
Read about why historical charge-off volatility is a very poor way of gauging a bank’s risk for reasons that are both statistical and practical.
Managing Merger Risk
Article
Read about how risk managers can help make sure that bank mergers create shareholder value before, during and after the deal.
Quizzing the Quants
Article
Read about how to choose a model that fully captures a bank’s risks by properly asking their developers about the model’s basic capabilities and input parameters.
Regulators Line Up Behind Economic Capital
Article
Read about why economic capital has become even more important in the regulation of U.S. banks.
Should We Capitalize Liquidity Risk?
Article
Should banks allocate capital to liquidity risk? Read about how banks can use quantitative techniques to improve cashflow forecasts, stress-test liquidity and funding strategies and evaluate the efficacy of liquidity reserves.
Strategic Opportunities in Risk And Capital
Article
Read about why all banks have to perform a tricky balancing act in terms of the credit rating they aspire to, their cost of funding, the risks they run, and the risk capital they hold against those risks.
The Risks That Regulators Dare Not Name
Article
Read about how efficiently Basel II captures the risk arising from an individual bank credit and the extent to which the new rules capture other bank risks and portfolio effects.
Top 10 Pitfalls in Economic Capital Modeling
Article
Read about the key pitfalls in the planning, quantification and rollout stages of any new economic capital program.
Triple Trouble
Article
Read about why the global credit crisis was due to many lenders failing to quantify the risks of targeting customers with poor credit histories, offering product structures unsuited to subprime and foreseeable macroeconomic shifts.
Why Benchmark Capital Factors Get Failing Marks
Article
Benchmark factors are borrowed from another bank or obtained from consultants who have performed risk capital analysis for a number of banks. Read about why this could be a problem when a bank is assumed to be too identical to the benchmark.
Download Our RMA Articles
Cheap Money Isn't The Problem, Cheap Risk Management Is
Article
The credit crunch was blamed on 'cheap money' where lenders lent too much money to risky borrowers. Read about why the 'cheap money' argument downplays the role of the credit spread, credit risk mitigants and underwriting standards.
Judgment Versus Risk Management Science – Are We Getting The Balance Right?
Article
Read about the argument that the drive toward objectivity on risk and capital is a good thing as long as the industry accepts that the role of risk numbers is to support and enhance management judgment.