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Next Generation Risk Management in the New Age of Structured Products

Next Generation Risk Management in the New Age of Structured Products

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Even before the financial crisis, financial firms struggled to get their enterprise risk act together. Then as now, structured products added a whole new layer of complexity. The problem is how to get on top of the data. Without the right data, risk management, in today’s high frequency markets, is like driving a Ferrari at night through a dense urban area without the benefits of illumination.

But we are approaching a new age of structured products – one in which a deeper understanding of the risks and returns embedded in individual portfolios and securities is essential. We can no longer rely solely on rating agencies and probability theories. We have to understand the underlying assets and be able to analyze them individually.

Professional risk management has become compulsory, thanks to Dodd-Frank. But, the lack of relevant and/or timely data is still frustrating the achievement of a holistic and, in some instances, real time view of many firms’ risk profile.

And the amount of data we need to manage risk and reporting has increased almost exponentially. Not only must we aggregate more data and ensure it is timely and accurate we must be able to analyze it quickly and effectively. Dark markets and opaque securities offer scant relief to troubled markets and demanding regulators.

Meeting these challenges is beyond any one provider. We need a joint approach in which different partners come together to offer unique solutions. We also need a highly scalable tool for the pricing, valuation, and risk management of today’s complex instruments and portfolios.

If we can’t price risk, how can we manage it?

In the meantime, technology is changing at a dizzying rate. Cloud computing, streaming data services and advanced risk analytics together with game changing developments in database technologies and data visualization are creating new tools for financial firms to navigate troubled markets.

But keeping up-to-date with these changes is a major task in itself.

To learn more, join Thomson Reuters, Numerix and Microsoft at SIFMA for a discussion around the different dimensions of data management and data analysis together with the business and technology trends that will build the risk management culture of the future in the new age of structured products.

Solution Center Session: Risk Management Thought Leaders Panel:

Improving Risk Management and Transparency for Structured Products, Exchange Traded and OTC Derivatives through Effective Data Management, and Innovative Analytic Models

Wednesday June 15th, 3:15 p.m. - 4:15 p.m. Hilton NY, Madison Room

Featuring Numerix and Thomson Reuters hosted by Microsoft