A poorly conceived affordable housing policy and the growth of an unregulated, opaque market for complex structured assets are among the potential causes of the subprime mortgage debacle. Richard Christopher Whalen offers his thoughts on the roots of the subprime crisis, the inefficiencies of proposed solutions and the best ideas for rebuilding market ... click here for more details.

What are financial guarantees? What are their risk benefits, and how can risk control practices be used to help value guarantees? Gordon E. Goodman outlines multiple methods for valuing guarantees and explores the expansion of the risk manager’s role in financial reporting.

Under Basel II, it is tricky to compute exposure for securities financing transactions (SFTs), bank-supplied loans that are secured by stock collateral. Dr.Marco Folpmers breaks down the DNA of SFTs and explains how to calculate counterparty credit risk and expected positive exposure for these loans.

In 2006, a global total of 349 natural catastrophes and man-made disasters claimed more than 31,000 human lives. Issuer volume of catastrophe bonds rose by 57% from 2006 to 2007 (to a record $7.7 billion), while simultaneously enabling yield-hungry investors to reap a return of around 16%. However, despite the continuing rise in ... click here for more details.

Valuation failures — such as errors in pricing securities — can be extremely damaging and need to be managed carefully. Philippe Carrel dispenses advice on how to control risks associated with the acquisition and management of data and emphasizes the importance of building an open pricing and modelling platform.

The Knights Templar were among the earliest and most successful international businessmen.They were major players in shipping, manufacturing and currency exchange, and they knew how to manage such risks as shipwrecks and piracy. Ultimately, however, they were undone by a major tail event. Ron Burtnett details the rise and fall of the Templars ... click here for more details.

What steps does a firm need to take to deploy a global, holistic approach for operational risk management? In pursuit of this objective, which different groups must be integrated? Jennifer Meiselman Salzman and Todd Ingersoll offer a concise plan for operational risk consolidation and discuss the challenges of this approach.

Score another victory for the bad guys. In late January — some 13 years after the Nick Leeson trading scandal brought down Barings Bank — the French bank Societe Generale revealed that it had suffered a €4.9 billion loss as a result of a series fraudulent trades executed by one of its futures ... click here for more details.

As financial services firms attempt to overcome multi-billion-dollar losses in the midst of a credit crisis, the demand for competent financial compliance professionals is rising. The total compensation packages being offered to financial compliance staff reflects this increased demand, according to Risk Talent Associates (RTA), an international executive search firm.