The Risk Live story
Nobody knows what the future holds, but it’s a safe bet it won’t look much like the past
Under pressure to cut costs, add clients and deliver better returns, banks and buy-side firms – and supporting industries – must scrap old ideas and disrupt, leveraging powerful new technologies. Firms face new opportunities, and threats, whilst business models, services, products and jobs are all in flux.
Risk Live 2019 explored four key themes set to shape the future for risk managers and risk transfer markets:
- Alpha, beta and data
- New ways of working
- The RFR revolution
- Tomorrow's CRO
ALPHA, BETA AND DATA
Low volatility and low yields have spurred huge growth in passive and quant investing – along with regular bouts of concerns about crowding. One answer has been to mine new datasets for hidden sources of alpha. But when volatility returns, rules-based investors may lose out to funds that are more nimble and can trade a wider range of assets.
NEW WAYS OF WORKING
Non-banks, exchanges and trading platforms already have a big say in equities and foreign exchange markets; now, banks are shaking up their approach to credit and rates. If flow business can be left to algorithms, then it frees up traders and salespeople to make more of the industry’s key strengths – a bigger capital and client base.
THE RFR REVOLUTION
Regulators in the UK and US are pressing market participants to abandon the Libor family of benchmarks, and switch to new risk-free rates. In Europe, the plan is to rehabilitate the old rates. It’s not yet clear whether either ambition is viable. The only thing that can be said confidently is that the project will inject a huge amount of risk into some of the world’s biggest financial markets.
On the face of it, CROs are getting an easy ride. Market, credit and op risk losses have all been subdued in recent years. But these exposures could leap as QE ends, the credit cycle turns, and cyber and data risks become more prevalent. On top of this a new suite of dangers is emerging – from climate change to income inequality and the erosion of trade and political orthodoxy. Tomorrow’s CRO will tackle this mix of exposures using new tools, and with a different blend of staff.
The latest developments in the risk world
No other event brings these topics together, because no other publication has Risk’s audience of technically focused professionals that span the disciplines of risk management and risk transfer.
We look forward to seeing you at Risk Live.
Duncan Wood, Global editorial director, Risk