Opinion/Risk management
Op risk data: HSBC hit with $400m external fraud loss
Also: China’s unlicensed trading clampdown; SocGen’s insurance mis-selling woes. Data by ORX News
Prediction markets can be a canary in the coal mine
Prices of contracts on the likes of Polymarket can act as signals for risk management and hedging, says risk expert
How AI agents can join the dots for risk managers
Citi risk expert outlines agentic AI tool that would pull together structured and unstructured data on trading and lending approvals to create single, unified view of risk
Do banks still need to validate GenAI models?
Regulators carved out GenAI models from new risk guidance. Banks shouldn’t see this as a reason to stop validating them.
Op risk data: Corporate spies spell trouble for BBVA
Also: BofA buttonholed for alleged Epstein links; minority shareholders take a bite of Brookfield. Data by ORX News
AI risk management and the shift to capability control
By reframing validation, banks can align innovation with regulatory demands and maintain robust risk discipline, argues risk manager
Tokenised commodities could help oil the machine
Shifting physical assets onto the blockchain eases collateral frictions, argues crypto expert
When trading speed outruns governance: the split-second control gap
A new form of light-driven electronics could be the next risk in market infrastructure, explains derivatives expert
What futures and options say about the cost of war
Spot prices reveal major disruption, futures indicate this will pass, options imply ongoing instability
For collateral, can TINA become TIA?
US Treasuries’ dominance as collateral in repo and derivatives is no longer set in stone, argues economist
Op risk data: HK gets tough on takeover in $200m takedown
Also: Bank staff steal state funds in India; Vanguard settles US net zero lawsuit. Data by ORX News
FRTB internal models: quo vadis?
Two risk experts explore how to adjust the FRTB framework to promote internal model usage
The loneliness of the model risk manager
Boards may see them as a drag on innovation; risk functions need to show they embrace efficiency
Italy’s spread problem is not (always) a credit story
Occasional doubts over Italy’s role in the monetary union adds political risk premium, argues economist
Op risk data: Kaiser will helm half-billion-dollar payout for faking illness
Also: Loan collusion clobbers South Korean banks; AML fails at Saxo Bank and Santander. Data by ORX News
Rethinking model validation for GenAI governance
A US model risk leader outlines how banks can recalibrate existing supervisory standards
The state of IMA: great expectations meet reality
Latest trading book rules overhaul internal models approach, but most banks are opting out. Two risk experts explore why
How geopolitical risk turned into a systemic stress test
Conflict over resources is reshaping markets in a way that goes beyond occasional risk premia
Op risk data: FIS pays the price for Worldpay synergy slip-up
Also: Liberty Mutual rings up record age bias case; Nationwide’s fraud failings. Data by ORX News
Allocating financing costs: centralised vs decentralised treasury
Centralisation can boost efficiency when coupled with an effective pricing and attribution framework
Collateral velocity is disappearing behind a digital curtain
Dealers may welcome digital-era rewiring to free up collateral movement, but tokenisation will obscure metrics