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WIFE Week in Risk (ending April 16th)

David Harper CFA FRM

David Harper CFA FRM
Staff member
In the forum this week (just a selected subset)
Bank and banking
Political and regulatory risk, including Systemic Risk (including BIS)
Technology, including FinTech and Cybersecurity
  • [GARP] Introducing Event-Centric AI for Risk Management (A simple approach for developing practical implementations of artificial intelligence) http://trtl.bz/2oncXnM
  • The Dark Secret at the Heart of AI https://www.technologyreview.com/s/604087/the-dark-secret-at-the-heart-of-ai/ “Already, mathematical models are being used to help determine who makes parole, who’s approved for a loan, and who gets hired for a job. If you could get access to these mathematical models, it would be possible to understand their reasoning. But banks, the military, employers, and others are now turning their attention to more complex machine-learning approaches that could make automated decision-making altogether inscrutable. Deep learning, the most common of these approaches, represents a fundamentally different way to program computers.”
  • An Intelligence in Our Image (The Risks of Bias and Errors in Artificial) by RAND Corporation Intelligencehttps://www.rand.org/pubs/research_reports/RR1744.html
  • How Failing to Develop a Disruption Model Can Kill Good Companies http://www.brinknews.com/how-failing-to-develop-a-disruption-model-can-kill-good-companies/ “About 70% of risk managers believe artificial intelligence (AI) represents a foundational change for their enterprise, yet only 15 percent of them are using it. More than 40 percent of risk managers believe AI’s significance is 1-3 years away, yet more than half of risk managers acknowledge having no plans to implement AI. Despite being in the business of risk, the majority has no risk mitigation plan for adoption or non-adoption.”
Exams, Financial Associations (GARP, FRM, CFA Institute) and Careers
Personal finance
Financial reporting, including Accounting and Audit
Case Studies and Companies, including Strategic or Reputation risk
  • At Wells Fargo, Crushing Pressure and Lax Oversight Produced a Scandal https://www.nytimes.com/2017/04/10/business/dealbook/11wells-fargo-account-scandal.html “To make the sham accounts look legitimate, Wells Fargo bankers engaged in a practice called simulated funding, the board’s report said. This was an illegal sleight of hand in which an employee transferred funds from one customer account to another, sometimes unauthorized account (or deposited and withdrew the employee’s own funds) to make it appear that the second account had been funded by the customer.”
  • Five damning revelations from Wells Fargo’s report https://www.ft.com/content/3de4cb5a-1e0b-11e7-a454-ab04428977f9
  • Wells Fargo Fake Accounts Investigation Whitewashes Glaring Risk Management Failures (by Yves Smith at naked capitalism) http://trtl.bz/2oLMvbc “Even worse, the report proves the board’s negligence by indicating it had noticed a major deficiency, that control functions were reporting to unit/profit center managers like Tolstedt, in 2013, yet was leisurely about addressing it. Keep in mind that is exactly the same kind of deficient structure that led to the JP Morgan London Whale scandal. It is a basic risk management failure to have control staff report to profit center managers. In fact, they are designed to be for show only. Does anyone with an operating brain cell think someone would make their boss look bad?”
  • Secret Recordings Play Role in SEC Probe of Insurer AmTrust https://www.wsj.com/articles/secret-recordings-play-role-in-sec-probe-of-insurer-amtrust-1491903011 “Unknown to the colleagues, the auditor was carrying a tiny recording device disguised as an ordinary Starbucks gift card, capturing every word for the Federal Bureau of Investigation … Before going to the government, the whistleblower—the former BDO auditor—joined forces in 2013 with a larger group that includes Harry Markopolos, a forensic accountant who warned the SEC about the Madoff scheme before it became public in late 2008. The Markopolos group hopes to profit by collecting a reward under the SEC’s Whistleblower Program, if the agency ever successfully brings legal action in the matter.”
  • A Barclays exec who went to prison for LIBOR-rigging breaks his silence: Traders have been served up as fall guys to protect these more powerful senior bankers http://www.businessinsider.com/alex-pabon-interview-libor-fixing-2017-4
  • United Airlines and how the ‘digital lynch mob’ is changing reputation risk for business http://www.polecat.com/blog/united-airlines-reputation-risk/
  • @United: Do you have a reputational risk policy? http://www.iii.org/insuranceindustryblog/?p=4931 “While the social media firestorm following the forcible removal of a passenger from a United Airlines flight highlights the importance of crisis and reputation risk management, it also underscores the potential liability airlines face from balancing duties to their customers, employees and to shareholders.”
Risk Foundations (FRM P1.T1)
Quantitative Analysis (FRM P1.T2)
Financial Markets and Products, including Interest Rates, Commodity Risk, and Foreign Exchange (FX)(FRM P1.T3)
Valuation and Risk Models, including Country risk (FRM P1.T4)
Credit risk (FRM P1.T6)
Investment risk, including Pensions (FRM P1.T8)
Current issues (FRM P2.T9)
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Well-Known Member
I just noticed with hindsight that you mentioned my posts, I was simply too overwhelmed with the other topics you have raised.

In particular, big thanks for the FT Duration article! More than happy with this one. Would have missed it.
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