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WIFE Week in Risk (August 19th)

David Harper CFA FRM

David Harper CFA FRM
Staff member
Subscriber
In the Forum This Week (selected only)
World
  • Turkey Will Put Capital Rules to the Test https://trtl.bz/2Mn34Yc "First, bank failures are triggered by funding problems: typically, a run on the bank and an inability to cover deposit outflows. More capital can’t protect against this risk. Banks are also highly leveraged by design. Unless they’re willing to return to 19th-century standards of 50 percent equity, the effectiveness of capital requirements will depend on the magnitude of exposure and loss in question." If you are wondering about the 18.0% (of risk-weighted assets, RWA) requirement mentioned in the article, it refers to the FSB's TLAC standard, see http://www.fsb.org/2015/11/tlac-press-release/
  • Turkey Was Ripe for a Currency Crisis. Will It Spread? https://trtl.bz/2PjCzQX ... [But this view seems credible:] Turkey’s Economic Red Flags Stand Out Among Emerging Markets https://trtl.bz/2PoyOKn " "Its economic woes include one of the largest trade deficits of any emerging-market country, unmatched external debts, a currency vulnerable to decline, exceptionally high inflation, unorthodox monetary policy and very little international goodwill."
  • [GARP] India’s Big Bank Heist https://trtl.bz/2Bv0Zo0
Banks and Wall Street
  • Wall Street Erases the Line Between Its Jocks and Nerds (There used to be a strict hierarchy: Traders made money and won glory while programmers wrote code and stayed out of sight. Those days are over) https://trtl.bz/2MWqcsN “Everyone who comes to sales and trading needs to know how to code.”
  • Nobody Says ‘Zelle Me’: Banks Struggle to Catch Up to Venmo https://trtl.bz/2MUkB6e At Bank of America, Zelle's transaction volume just doubled YoY to over $9.0 billion (disclosure: I am long BAC). I use Venmo, but I'm interested to try Zelle.
  • Banks and Retailers Are Tracking How You Type, Swipe and Tap https://trtl.bz/2MpjvTX "The data collection is invisible to those being watched. Using sensors in your phone or code on websites, companies can gather thousands of data points, known as behavioral biometrics, to help prove whether a digital user is actually the person she claims to be."
  • U.S. Pursues One of the Biggest Mortgage-Fraud Probes Since the Financial Crisis (WSJ) https://trtl.bz/2MWfUc2
  • Wells Fargo's Apologies Leave Customers Unmoved (ft.com) https://trtl.bz/2Pirpfo "There is a message in here for any big company trying to shrug off a hit to its reputation: however much you may think you are done with the past, the past is not done with you."
Quantitative
Risk/FRM
Cyber and Technology
Investing
Other (Climate and Future)
  • Why Ravaging Heatwaves Matter to World’s Dinner Table https://trtl.bz/2PgTR1j "To see the impact of record-breaking temperatures around the world, watch wheat. Found in everything from bread to noodles, biscuits to cereals, beer to cakes -- there is no more widely grown staple crop and more than 170 million metric tons trade every year."
  • Yuval Noah Harari on what the year 2050 has in store for humankind https://www.wired.co.uk/article/yuval-noah-harari-extract-21-lessons-for-the-21st-century A thought-provoking extract from his upcoming book, I read Sapiens while on vacation and am still reeling from some of it!
  • We All Have It Now https://ofdollarsanddata.com/we-all-have-it-now/ "Historically, having an informational edge was worth something. Being faster or having better access meant making more money. Not anymore."
 
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