Visualizing the Stress of US Banks A recurring cycle of regulatory stress testing exercises has become the new normal in the banking world, at least on the two shores of the northern Atlantic. The periodicity of the European stress testing heartbeat has not yet been firmly established. Did we just miss a beat in 2015 (a so called palpitation) or will the European cycle have two (or more) years periodicity? Who knows.
Concentrating on Concentration Risk Senior economists such as Ben Bernanke were still studying the Great 30s Depression when the financial crisis struck in full force circa 2007. Given the complexity of the modern economic and financial landscape compared to the blessed good old days - we have no reports of FWMD (financial weapons of mass destruction) from back then - we can reasonably project that economists will be studying and pontificating on causes and remedies for the current crisis for the next 100 years or so
A mini course on risk management, its perils and the silver lining When talking about risk management, it is not very clear what we are talking about in broad terms, definitely not getting clearer when we start getting into the details and it is even not clear how to best use the (possibly flawed) insights we produce.
Yet that’s what we have at this stage and with lemons we do lemonade.
FuriousBanker(TM) helps you learn risk management concepts in a fun and engaging way. This educational game series for mobiles and tablets is developed by Open Risk to enable modern interactive elearning for people working (or aspiring to work) in financial risk management.
The first episode sees FuriousBanker facing The credit detox challenge:
Game instructions for FuriousBanker:
You Objective: You inherited a pretty toxic credit portfolio and your objective is to reduce the concentration, even while improving your profitability.
EU Risk Dashboard Released About the app The EU Risk Dashboard is a web app developed by Open Risk to assist with the exploration and understanding of the large number of economic indicators published by the ECB in its Statistical Data Warehouse. The app data are derived from the timeseries available in the Warehouse. Most readings in the currently selected series are monthly and update automatically when those become available at the Warehouse.
We are happy to publish the first installment of a trilogy that focuses on the risk factors that can turn any credit portfolio toxic.
The first topic is default correlation, a topic that is both core to understanding credit risk and much misunderstood.
Enjoy!
The Stress Test Explorer is a web app developed by Open Risk to assist with the exploration and understanding of the large number of results published by the European regulatory authorities (ECB/EBA) in connection with the 2014 Comprehensive Assessment exercise. The app is now live and freely accessible here.
Please note: The app is requires a modern browser to display graphics
In line with the beta testing status of the entire Open Risk website, this app may evolve, subject to user comments and feedback.
RegNews, the Regulatory News Aggregator With all the ongoing activity around financial regulation having a convenient aggregation point for the main news is an indispensable tool for financial risk managers. This prompted us to build and roll out the Regulatory News App (RegNews in short), which is now live and freely accessible here. The app is designed to be usable both on a desktop and mobile environment.
In line with the beta testing status of the entire Open Risk website, this app will evolve, subject to user comments and feedback!
As part of the public beta testing programme, two new Open Risk Academy courses are accessible absolutely free (and with no strings attached :-).
The courses are introductions to measuring credit name or sector concentrations in credit portfolios. They cover the following topics:
The concept of credit name or sector concentration - what it is and how it can be measured
The regulatory context and how the issue is covered by requirements and regulatory guidance
Can’t turn around, we have come this far by faith…
Open Risk is now open for public beta testing.
We’ll keep the site in public beta stage for as long as needed to smooth out the rough edges.
We got the first “like” on social media, the lucky first liker earned a lifetime membership award. Now we have to think of something suitable for the second and third, as winner takes all mentality is not in our world outlook.
Alpha testing did not reveal any fatal problems with the Open Risk Academy website. Many thanks to Odysseus for painstakingly testing everything!
As of this weekend login details were sent to select volunteers with a mission to further test drive Open Risk. This limited beta testing will be ongoing for the duration of May.
In the meantime, development continues
Many thanks,
Open Risk
Open Risk developed an online accessible version of the AQR manual that offers additional means to access and browse the Phase 2 ECB AQR Manual. The asset quality review (AQR) was one of the components of the comprehensive assessment performed by the ECB prior to assuming full responsibility for supervision under the single supervisory mechanism in November 2014
NB: The AQR manual is now being integrated into the Open Risk Manual.
We just added a new course at the Open Risk Academy!
The course covers name concentration risk measurement, chiefly the construction of suitable metrics based on portfolio data (Free registration is required for this course)
The Risk Manual is one of the core tools of the Open Risk Commons.2
We have released a first set of article entries covering a broad area of risk management topics.
The first batch of open source tools focusing on Credit Portfolio calculations is now available here. The functionality aims to standardize Name Concentration Measurement (concentrationMetrics)
Equinox Applications This page collects Equinox Application documentation for quick reference.
NOTE: Equinox is still in active development. As the functionality of the platform is enhanced, the documentation will be enriched and updated, following also user feedback.
