June 2014—This paper describes the seven steps that can help banks to develop better stress tests. The seven steps are: data preparation, strategic PMO, robust methodologies, superior portfolio analytics, persuasive communication, macro-scenarios and correlations, as well as the stress-testing model.
Macroeconomic developments, heightened regulation, and pressure on margins and profitability are moving risk management to the top of the agenda for CEOs and their boards.
The past decade saw an unprecedented rise in the fortunes of emerging-market banks. Less affected by the global financial crisis than their developed-world peers, their collective revenue surged to $1,400 trillion in 2012 from $268 trillion in 2002 (exhibit). The future, however, may be a different story. Historically strong capital and liquidity positions have eroded, and operating pressures are mounting from a combination of factors including tighter US monetary policy, stronger growth in developed markets, a changing regulatory landscape, and increasing competition. Read more
In 2011, Standard & Poor’s Ratings Services’ downgrade of the U.S. had spillover effects on corporate borrowers throughout the country. A year later, the same happened with Europe’s economic turmoil and sovereign debt crisis. Nevertheless, corporate borrowers showed some resilience during 2012. In the full year, 84 global corporate issuers defaulted, up from 53 in 2011 and nearly the same as the 2010 total of 83 (see table 1). These 84 defaulted issuers accounted for a total of $86.7 billion in debt, up from $84.3 billion in 2011. (Watch the related CreditMatters TV segment titled, “The Key Findings Behind Standard & Poor’s 2012 Global Corporate Default And Ratings Transition Study,” dated March 18, 2013.)
Download the presentation by Mr DR Dogra, MD/CEO Care Ratings
orrelation Risk and Why it is Critical in Finance
Date: Tuesday, October 21, 2014
Time: 8:00 am HST | 11:00 am PDT | 12:00 am MDT | 1:00 pm CDT | 2:00 pm EDT | 7:00 pm BST
Duration: 60 minutes
In this exclusive webcast, our expert will define and explain the critical topic of Correlations in Finance. Viewed differently in different financial environments, participants will gain a thorough understanding of Financial Correlation Risk in the areas of Investing, Trading, Risk Management, Regulation and the 2007-2009 Global Financial Crisis. Produced in an interactive format, participants will also have the added benefit of two simulation models in Excel/VBA (one showing the Impact of Correlation on Value at Risk, and one on Dispersion Trading) that will be presented and distributed to all who attend.
Chris Donohue, Managing Director, Research and Educational Programs
Gunter Meissner, PhD, University of Hawaii and CEO, Cassandra Capital Management
Non-performing assets (NPAs) are a key concern for banks in India. While public-sector banks have outperformed private banks in financial operations, their NPAs have risen substantially, suggesting a high probability of credit defaults and impact on profits
Webinar: Evolving Practices in Stress Testing Structured Finance Portfolios
Date: Thursday, October 16, 2014
Time: 10:00 AM EST/730Pm IST
Given the evolving regulatory environment, market participants are finding the need for greater transparency, consistency, and accuracy in reporting and analysis of their structured finance products. Join Moody’s Analytics and PRMIA for a complimentary webinar on Evolving Practices in Stress Testing Structured Finance Portfolio which focuses on:
- Identifying the most challenging asset classes
- Complexities in forecasting RWA
- How to dynamically run macroeconomic scenarios
David Kurnov – Director, Structured Analytics and Valuation, Moody’s Analytics
Alexandru Voicu, Director of Education, PRMIA
This webinar is complimentary for all participants and is organized and presented by Moody’s Analytics. Thank you to Moody’s Analytics for making this webinar available to PRMIA members for their learning opportunity
SEBI has issued a circular for creating a Core Settlement Guarantee Fund to keep a tap on credit risk via default waterfall and stress tests etc for settlements in marteks etc
Indian Prime Minister Narendra Modi’s triumph in the April-May general elections sparked speculation that India would see drastic economic reforms, including biting the bullet on subsidies and changing the labor laws. But we don’t believe that is the best lens to use to evaluate the first four months of the administration. A report card should also evaluate whether the government is taking the necessary steps to revive India’s growth prospects by addressing its most binding constraints. India’s GDP growth had slid into a sub-5% rut in fiscal years 2013 and 2014 because of the emergence of factors detrimental to the business climate. Economic reforms are necessary to ensure sustainable high growth. But in the next 12 to 24 months, we believe improving efficiencies through eliminating bottlenecks will lead to faster growth.
- India’s improved political setting heralds a more conducive environment for reforms, providing a boost to growth prospects and the potential for improved fiscal management.
- We are affirming the ‘BBB-/A-3′ sovereign credit rating on India and revising the outlook on the long-term rating to stable from negative.
- The stable outlook reflects our expectation that the newly elected government will be able to implement reforms that spur growth, which in turn improves fiscal performance. View more
Green bond issuance is approaching $40 billion this year. This growth speaks to the investment community’s rising awareness of climate change and its appetite for fixed income that meets ESG standards but without compromising returns. It also reflects recognition that capital markets can efficiently work to meet the capital needs of climate-sensitive infrastructure.
Investor demand is in place, but what are the next steps for making green bonds a mainstay? Join us for this live webinar where industry experts will discuss:
- The future: Directions the market may take to provide capital at a scalable rate
- Investor concerns and market necessities: Measurable green industry standards, KPI’s measuring impacts, green bond ratings, and specialized investment vehicles, a sub and index measures
- Market infrastructure: Introducing the S&P Dow Jones Green Bond Index and Green Project Bond Index as a way to bring more transparency to the debate
- Can the green fixed income market options meet expected returns the risk-return objectives of long-term institutional investors?
Christopher Flensborg, Head of Sustainable Products and Product Development, SEB
Anadi Jauhari, Senior Managing Director, Emerging Energy and Environment Group (EEE Group)
Manuel Lewin, Head of Responsible Investment, Zurich Insurance Company
COMPLIMENTARY WEBCAST: BIG DATA AND ITS IMPACT ON INSTITUTIONAL INVESTORS
Wednesday, 8 October, 2014, 11:00 am Singapore time, 2:00 pm Melbourne/Sydney time
Helping institutional investors get ahead of Big Data
Big Data keeps getting bigger – in the business media, across governments, amongst professional and industry associations and inside institutional investor operations. It is increasingly emerging as the newest resource for achieving competitive advantage. However the torrential streams of data are proving to be challenging. The solution lies in identifying most meaningful data for each organization’s objectives, then building the most efficient operational model to transform that data into actionable insights and business intelligence.
This hour-long session will explore key insights around Data Strategy for Institutional Investors like Sovereign Wealth Funds, Central Banks, Government Agencies, Pension Funds, Insurance companies, Asset Managers and focus on:
|•||Key drivers behind Big Data- regulatory challenges, technology advancement and the need for business differentiation|
|•||Emerging trends and challenges for institutional investors|
|•||Managing data from an asset servicing and custody point of view|
|•||Helping institutional investors achieve an efficient operational model to get ahead of accelerating trends|
|Big Data and Its Impact on Institutional Investors|
||Wednesday, 8 October 2014|
||11:00 am Singapore time (GMT+8)
2:00 pm Melbourne/Sydney time (GMT+11)
||Leigh Powell, Brand Editor, AsianInvestor|
Northern Trust Corporation:
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 19 US states, Washington D.C., and 19 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2014, Northern Trust had assets under custody of US$6 trillion, and assets under investment management of US$924.4 billion. For more than 125 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found athttp://www.northerntrust.com/disclosures
We downgraded 148 issuers and upgraded 161 in second-quarter 2014, the second time in the past 12 quarters that upgrades outpaced downgrades. A significant portion of the upgrades during the quarter were on European issuers, which saw 49 upgrades compared with just 17 downgrades, reflecting the recovering economic climate in the region following the eurozone crisis. More