To meet strict new regulatory requirements, financial institutions must implement robust AML programs. Karim Rajwani examines different types of AML risk, explains why it is so difficult to detect suspicious activity and outlines the operational risk management steps necessary to protect against money laundering.

What are the current weaknesses and strengths of risk disclosure practices at banks and securities firms? Dr. Alessandra Mongiardino and Hervé Geny identify the types of information that are currently disclosed and explain the steps that firms need to take, collectively, to improve the transparency and comprehensiveness of disclosures for ... click here for more details.

Viewpoint: It`s Not Math Is mathematical know-how critical to a successful derivatives career? Pablo Triana argues tht "street smarts," industry knowledge and practical experience are far more important success factors than a background in mathematics. Aaron Brown in contrast, contends that math is essential to derivatives professionals with ... click here for more details.

What is R-squared and what role does it play in the evaluation of credit risk obligors? How can the R-squared value of an obligor be derived? How do different R-squared values impact the loss distribution of a credit risk portfolio? And how do these values affect a ... click here for more details.

Is there a simple, efficient way to calculate the specific risk surcharge for defaultable trading-book positions? Riccardo Rebonato, Jan Kwiatkowski and Lorenzo Liesch offer an easy-to-implement, analytic method to estimate specific risk and an "implied" method to calibrate it. Their method is conceptually similar to the Basel II ... click here for more details.

Book Review: Risk Management for Pensions, Endowments, and Foundations Author: Susan M. Mangiero Publisher: Wiley, November 2004

Book Review: Corporate Derivatives: Practical Insights for Real-Life Understanding Author: Pablo Triana Publisher: Riskbooks, May 2006

Editor`s Letter: Derivatives: Weighing the Value of Mathematics

1. Emerging Markets Will Move Toward Basel II – Gradually 2. Economic Capital: Helpful Calculations