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  Issue 16 | Archive August 2013

RMI Holds its Seventh Annual Risk Management Conference

The NUS Risk Management Institute (RMI) successfully hosted its Seventh Annual Risk Management Conference, themed “Risk Management in the New Normal”, from 11 to 12 July 2013 at Shangri-La Hotel, Singapore. The one-day policy forum, followed by a one-day scientific program attracted over 300 policy makers, regulators, industry executives and academics for talks and discussions on financial risk management.

The conference addressed the challenges that financial institutions face in operating in a more restricted business environment, which include complying with changing rules, fostering the right risk culture and a volatile economic climate. Increased capital requirements under Basel III and the prohibition of proprietary trading under the Dodd-Frank Act are only some of the tightened restrictions banks are facing today in the aftermath of the 2009 global financial crisis. However, the stringency of these ex-post regulations may never be enough as the financial industry continually evolves to circumvent them.

The first day of the conference consisted of various policy discussions that started with ¡°The New Regulatory Paradigm¡±. Chaired by Lutfey Siddiqi, Managing Director at UBS and Adjunct Professor of RMI, the session featured panelists David Dredge, Co-Chief Investment Officer at Fortress Convex Strategies Group of Fortress Investment Group, Jacqueline Loh, Assistant Managing Director of Policy, Risk & Surveillance at the Monetary Authority of Singapore, Frankie Phua, Executive Director and Head of Credit and Country Risk Management Division at UOB, and Dr. Jing Yang, Senior Economist at the Monetary and Economics Department of Bank of International Settlement. A well-represented dialogue between industry players and regulators, both local and international, the discussion centered on whether the complexity of the current regulatory regime was self-defeating by allowing players to game the system.

A group of several CROs shared their views on the emerging issues in the industry such as the CRO¡¯s role in setting the right risk culture and in creating risk consciousness in the Board, and a review of the feasibility of enterprise risk management. The chair, Gopalan Vedartham, Managing Director and Head of Market Risk, Asia Pacific at Barclays Bank, hosted the session featuring three CROs, namely, Jeanne Short of UBS Investment Banking and Group, Asia-Pacific, Anju Patwardhan of Standard Chartered Singapore, and Gilbert Kohnke of OCBC Bank.

The following session was entitled ¡°Monetary Policy and Global Liquidity Trends¡± and was chaired by Dr. Yiu Siu-Fung Matthew, Group Head and Lead Economist at ASEAN+3 Macroeconomic Research Office (AMRO). The session involved the discussion of various issues including Quantitative Easing, Japan¡¯s economic prospects and fixed income market volatility. Speakers included Dr. Don Hanna, Managing Director of Global Liquid Markets Group at Fortress Investment Group, Takuji Okubo, Principal and Chief Economist at Japan Macro Advisors, and University of Lugano¡¯s Prof. Antonio Mele, who is also a Senior Chair at the Swiss Finance Institute.

In the first afternoon session, Prof. Duan Jin-Chuan, Director of 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 the Financial Services Consulting, PricewaterhouseCoopers Japan KK.

The other two afternoon sessions were conducted in collaborations with the International Association of Credit Portfolio Managers (IACPM): New Strategies for Credit and Portfolio Risk Management in Asia, and Applied Issues in Credit Portfolio Risk Management. Senior practitioners from international and regional banks as well as consulting firms shared their insights on the evolving landscape of credit portfolio management. They include: Dr. Uwe Stegemann, Director/Senior Partner at McKinsey & Company, Marcia Banks, Associate Director of the IACPM, Wirawat Panthawangkun, Executive Vice President, CRO and Head of Enterprise Risk Management Division at Thailand¡¯s Kasikornbank, Benoit Stroesser, Senior Credit Portfolio Manager at JPMorgan Chase and Seamus Toal, the Deputy CRO of DBS.

The second day of the conference was a scientific program that followed the format of an academic conference where concurrent sessions were devoted to the dissemination of scientific findings. Topics explored by the papers presented include the modeling and understanding of systemic, market, liquidity and credit risk, credit portfolio optimization and volatility, among many others. The plenary session included talks by Prof. Stephen Figlewski of New York University¡¯s Stern School of Business, and Prof. Steven Kou, Professor of Mathematics and the Director of the Center for Quantitative Finance at the NUS.

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Published quarterly by Risk Management Institute, NUS
Editor: Ivy Wang (rmiwy@nus.edu.sg)