Derivatives disclosure calls mount

Warren Buffett’s stinging critique of the derivatives business in March represents the latest call for more derivatives disclosure. But despite some notable moves in this direction, most financial institutions remain stubbornly opaque. Christopher Jeffery reports

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Warren Buffett, the renowned US billionaire investor, issued a broadside at the derivatives industry last month by describing the instruments as “time bombs” and “financial weapons of mass destruction”. His views strongly contradict those of Alan Greenspan, chairman of the US Federal Reserve, who again last month defended the role of derivatives as powerful hedging tools that have made the world’s financial markets safer. But calls for more derivatives disclosure are unlikely to

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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