The Evolution of Enterprise Risk Management in Financial Markets (Market Focus)

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
  • METHODOLOGY
• ANALYSIS
  • Introduction
  • Credit risk failures can precipitate liquidity risk, so model assumptions need to be dynamic
    • Sub-prime crisis background
    • Credit risk challenges: leverage and modeling
    • Credit risk challenges: ratings agencies
    • Credit risk challenges: aggregation and integration
    • Credit risk challenges: knock-on effects
    • Implications for credit risk assessment and pricing
    • Changes to ratings agency policy and practice
    • Modeling
  • Over-reliance on modeling and silo structures prevented the successful aggregation of portfolio risk profiles.
    • Modeling shortfalls
    • Liquidity risk
  • While credit and market risk have driven investment for some time, operational risk is still very much evolving
    • ORM process
    • Communication is key.
  • The growing convergence between IT and risk is being driven by regulatory change
    • Compliance as opportunity.
    • MiFID and RegNMS update
  • Conclusion
• APPENDIX
  • Definitions
  • Extended methodology
  • Further reading
  • Ask the analyst
  • List of Figures
    • Figure 1: Enterprise risk management map
    • Figure 2: The levels of ORM
    • Figure 3: Investment drivers