A survey of existing definitions When looking up the meaning of risk we are immediately confronted with a surprising situation. There is no satisfying and authoritative general purpose one-liner that we can adopt without second thoughts. Let us start with the standard dictionary definitions: The online Merriam Webster Dictionary defines risk as the possibility of loss or injury The online Cambridge Dictionary opines that risk means the possibility of something bad happening The Oxford English (Concise, Hardcover!
Seven Heavens of Finance and the Open Risk API Back-to-basics is not salvation It has become trendy since the financial crisis to be wearing an “anti-complexity” hat in matters concerning the shape of the financial system. This is an understandable reaction to the entangled constructions that had sprung to existence in the hyper-leveraged markets of the “naughty noughties”. Yet shifting through the ruminations and proclamations one cannot help but get the impression that there is a sort of denial of the complexity that underlies the real economy.
Securitisation versus Banking The ever elusive CMU dream There is(/was) renewed interest in EU-land over deepening a “capital markets union”, aka “CMU”. It is among the initiatives being pursued by the Commission in order to help accelerate growth in the European Union. The initiative encompasses many elements, both around equity (shares) and debt markets. One important pillar of the CMU aims to re-launch some version of an EU securitisation market. This segment was never really defined in a EU-wide basis.