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Risk management in the new normal

26 July 2013



Managing Director of UBS and Adjunct Professor of RMI, Lutfey Siddiqi (far left) chairing a discussion on “The New Regulatory Paradigm”


Prof Duan introducing a stress testing framework using RMI’s bottom-up corporate default prediction model


Prof Figlewski and Prof Wu Liuren, Co-Chair of the Scientific Programme at the conference.

In the aftermath of the 2009 global financial crisis, banks face tightened restrictions. These include increased capital requirements under Basel III, the new global regulatory standard for banks that a number of jurisdictions have already implemented.  However, the stringency of these regulations, which aim to address past excesses in the banking sector, may never be enough as the financial industry continually evolves to circumvent them. Thus, the onus and accountability should be placed on the banks themselves to self-regulate, instead of playing a cat and mouse game with regulatory authorities.

This was one of the perspectives offered during the opening policy forum at the 7th Annual Risk Management Conference at the Shangri-La Hotel Singapore. The two-day conference, which was hosted by the Risk Management Institute (RMI) at NUS in collaboration with the  International Association of Credit Portfolio Managers (IAPCM) on 11 and 12 July 2013, brought together over 300 policymakers, regulators, industry executives and academics for talks and discussions on financial risk management.

This year’s conference, themed “Risk Management in the New Normal”, addressed the challenges that financial institutions face when operating in a more restricted business environment, which include complying with changing rules, fostering the right risk culture and a volatile economic climate.

The first day of the conference consisted of various policy discussions that started with “The New Regulatory Paradigm”, a well-represented dialogue between industry players and regulators, both local and international. The discussion centred on whether the complexity of the current regulatory regime was self-defeating by allowing players to game the system. 

In another session, Professor Duan Jin-Chuan, Director of NUS-RMI, introduced a stress testing framework using RMI’s bottom-up corporate default prediction model. This complemented an earlier presentation on generalized stress-testing by Dr Jeffery Bohn, Head of the Risk and Regulatory Practice within Financial Services Consulting, PricewaterhouseCoopers Japan KK.  

The second day of the conference featured a scientific programme that followed the format of an academic conference where concurrent sessions were devoted to the dissemination of scientific findings. The papers presented covered topics such as the modelling and understanding of systemic, market, liquidity and credit risk, credit portfolio optimisation and volatility. Plenary sessions included talks by Professor Stephen Figlewski of New York University Stern School of Business and Professor Steven Kou, Director of the Centre for Quantitative Finance at NUS.

For more information on the Conference, visit www.rmi.nus.edu.sg/events/conferences/RMC2013.

By NUS Risk Management Institute



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