We emphasize and encourage links between academic researchers and practitioners at financial institutions to bring theoretical techniques to bear on real-world issues.
We are focused on identifying the best solutions in global risk practices
The recent financial crisis reinforced the centrality of research in assessing, reporting, and mitigating risks in the financial services sector. From both macro and micro perspectives, our research programs deliver a wide range of insights to assist our members
Research Approach
We emphasise and build connections between academic researchers and industry practitioners at financial institutions to bring theoretical techniques to bear on real-world issues.
Governmental Responses and Firm Performance During the Pandemic: An Integrated Assessment Edina Berlinger, Department of Finance, Corvinus University of Budapest, Hungary Dieter Gramlich, Baden-Wuerttemberg Cooperative State University Heidenheim (DHBW), Germany Thomas Walker, John Molson School of Business, Concordia University, Montreal, Canada Yunfei Zhao, John Molson School of Business, Concordia University Montreal, Canada Download the full paper -… View Article
FINANCIAL INNOVATION SERIES: Artificial Intelligence and Machine Learning: A Model Risk Management Perspective Alexey Rubtsov, PhD, Senior Research Associate, Global Risk Institute Download the full Report – PDF Version INTRODUCTION The last decade has witnessed a large-scale adoption of Artificial Intelligence and Machine Learning (AI/ML) models in the financial sector. Although there are many benefits… View Article
Gamma and Vega Hedging Using Deep Distributional Reinforcement Learning John Hull, Senior Fellow, GRI and Professor, Joseph L. Rotman, School of Management, University of Toronto Jay Cao, Jacky Chen, Soroush Farghadani, Zissis Poulos, Zeyu Wang, and Jun Yuan Joseph L. Rotman, School of Management, University of Toronto Download the full Report – PDF Version OVERVIEW:… View Article
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Emerging Risks
Our research team is tasked with identifying new and emerging insights to better understand risks and trends for the financial sector.
Climate change is a critical global concern that presents issues associated with warmer temperatures, increased water scarcity, and more frequent and severe weather events. All these factors can threaten the financial sector and the economic security...
Climate change is a critical global concern that presents issues associated with warmer temperatures, increased water scarcity, and more frequent and severe weather events. All these factors can threaten the financial sector and the economic security. The physical risks of climate change present a clear threat to operations, but new investment opportunities and product offerings are also needed to respond to the changing world needs.
GRI is engaged in expanding financial sectors understanding of climate-related risks and specifically in identifying proactive responses.
Cyber security practices and insights on latest methods are critical elements that need to be identified, studied and understood. Fraud, money laundering, tax evasion, terrorist financing as well as fraudulent insurance claims are just some of the criminal actions the sector must also be vigilant in opposing...
Cyber security practices and insights on latest methods are critical elements that need to be identified, studied and understood. Fraud, money laundering, tax evasion, terrorist financing as well as fraudulent insurance claims are just some of the criminal actions the sector must also be vigilant in opposing.
We expose our members to industry experts and equip them with knowledge to help them mitigate threats, identify consumer trends and capitalize on new opportunities in technology. GRI collaborates with authorities leading the charge in combating these activities to share their expertise with members to aid in developing their response capabilities as well as improving loss rates and operational efficiency.
Global affairs are in a state of disruptive transition. Trends like the growth of emerging economies, the rise of populism, and evolving security threats are increasing multipolarity in international relations, upsetting trade and investment flows, steering markets and shaping regulation...
Global affairs are in a state of disruptive transition. Trends like the growth of emerging economies, the rise of populism, and evolving security threats are increasing multipolarity in international relations, upsetting trade and investment flows, steering markets and shaping regulation. Multilateral organizations, national and sub-national governments and civil society groups often hold competing interests and objectives, and the relationships between these constituencies can shape the business environment in which financial institutions operate.
Collaborating with field specialists in industry and academia, GRI is committed to helping our members grapple with rising uncertainty in global politics and adapt risk management strategies in response to geopolitical developments.
Macroeconomic risk derives from the behaviour of industries and governments and the relationships between them rather than from individual companies. It concerns fiscal and monetary policies, trade and investment flows and political developments on a national and international scale, and the effects of these factors on financial portfolios and company valuations...
Macroeconomic risk derives from the behaviour of industries and governments and the relationships between them rather than from individual companies. It concerns fiscal and monetary policies, trade and investment flows and political developments on a national and international scale, and the effects of these factors on financial portfolios and company valuations. Intermediate variables of particular importance to macroeconomic risk include equities and commodities markets, business cycles, unemployment, inflation, interest rates, prices, and exports/imports.
GRI seeks to support our members as they refine and supplement existing risk management practices in response to changing macroeconomic conditions.
The 2008 financial crisis demonstrated how a seemingly delimited event can have consequences that span far beyond any one company or sector. When a large, interconnected organization fails or experiences significant disruption, a ripple effect can spread through the marketplace, destabilizing economies and causing entire industries to collapse.
The 2008 financial crisis demonstrated how a seemingly delimited event can have consequences that span far beyond any one company or sector. When a large, interconnected organization fails or experiences significant disruption, a ripple effect can spread through the marketplace, destabilizing economies and causing entire industries to collapse. It often behooves intervention on the part of governments and regulators to prevent further contagion and design policy responses that can avert or mitigate similar crises in the future. Organizational leaders must remain vigilant to anticipate and respond to financial instability and systemic phenomena, and GRI stands ready with information and support.
The corrective measures taken by public authorities to hedge against volatility or system failure can also be a source of concern in and of themselves for risk managers. Government oversight, compliance demands and ethical standards impose duties and obligations that financial institutions must satisfy. Failure to keep abreast of regulation and industry best practices can jeopardize a firm’s legal standing, reputation and earnings. GRI is further committed to helping our members improve processes, refine governance systems and build strategies to highlight the most salient regulatory risks.
All organizations are faced with risks that have the potential to negatively affect their business. Risk management practice in financial services focuses on identifying, measuring and analyzing risk to minimize negative impact...
All organizations are faced with risks that have the potential to negatively affect their business. Risk management practice in financial services focuses on identifying, measuring and analyzing risk to minimize negative impact.
GRI assists in first making sure members know what risks exist and promoting the best practices for handling those risks.
Technology disruptions to the financial sector have the potential to impact individuals, disrupt economies, and destabilize governments. Digitalization and technological advances are challenging the way financial institutions operate and creating new consumer expectations...
Technology disruptions to the financial sector have the potential to impact individuals, disrupt economies, and destabilize governments. Digitalization and technological advances are challenging the way financial institutions operate and creating new consumer expectations.
Financial institutions need to change and adapt in response to these expectations with alternative product offerings and services. GRI understands this demand to stay current and is dedicated to empowering our member institutions with the latest information to stay abreast on developing Fintech innovations; gaining insight on their capabilities, understand their risks and identify the opportunities.
20 September 2021 | Sustainable Finance and Climate Risk
The Role of Equity Investments in Financing Clean Energy Technologies in Canada The purpose of this research project is to explore the methods to enlarge and improve private equity financing (i.e., angel investing, venture capital, and private equity), as well as address the fundamental weakness in Canadian financial system that private equity is less adequate… View Article
20 September 2021 | Sustainable Finance and Climate Risk
Practical Application of TCFD: Incorporating Physical Climate Change and Extreme Weather Risk into Portfolio Management The purpose of this research is to create four new Climate Risk Matrices to complement those already created for Commercial Real Estate and the Transmission and Distribution of Electricity, which were utilized throughout the “Factoring Climate Risk into Financial Valuation”… View Article
20 September 2021 | Sustainable Finance and Climate Risk
Impact of Catastrophic Floods on Residential Housing Value, Mortgage Arrears and Mortgage Defaults: A Pan-Canadian Perspective The benefit of this research will be to elevate understanding by mortgage providers regarding their exposure to residential flood risk, and provide direction to lenders regarding means to mitigate residential flood risk. This study will compare housing price, mortgage… View Article
Local Factors Determining COVID-19 Exposure and Property Cash Flows: Evidence from the Canadian REITs This project will help improve the understanding of the impact of COVID-19 on Canadian commercial real estate and REIT markets analyzing across property types. The project also aims to identify local factors helping COVID-19 spread and which ones of those matter… View Article
Building resilience in long-term investment strategies – what has the COVID-19 pandemic taught us about climate risks? The purpose of this research is to produce a report that outlines the lessons learned from COVID-19 for investment management, and how these lessons can be applied to building more resilient investment portfolios to climate change. Particularly the… View Article
Investment Risks and Opportunities During a Pandemic: Implications for Institutional Investors This project will employ data on such epidemics as the 2002-2004 Severe Acute Respiratory Syndrome (SARS), the 2009 Swine Flu (H1N1), the 2012 Middle East Respiratory Syndrome (MERS-CoV), and the current COVID-19 outbreak, and will try to answer such questions as: How do pandemics… View Article
Strapped for Cash: How Equity Investments Can Weaken the Finances of Pension Plan Sponsors During CV19-type Crises The research objective of this project is to better understand how a pension plan’s equity investments impact the financial situation of the plan’s sponsor entity during severe economic crises such as COVID-19. The analysis will address three main… View Article
The goal of this research project is to provide practical guidelines for institutional investors, risk managers, and insurance/bank professionals who are concerned about the potential effect water risk may have on the value and performance of their investment and/or loan portfolio as well as their expected insurance policy payouts.
This project provides a discussion of the state of the market for robo advisors in Canada that could assist pension participants, comparing that approach to traditional approaches provided by financial advisers or by target date funds.
16 October 2020 | Climate Risk and Sustainable Finance
Project Leads: Kathryn Bakos and Blair Feltmate, Intact Center on Climate Adaptation, University of Waterloo – This research project builds on the report Factoring Climate Risk into Financial Valuation, to create four new Climate Risk Matrices for new sectors: (a) banking, (b) Property & Casualty (“P&C”) insurance, (c) hydro electricity generation, and (d) wind electricity generation.
16 October 2020 | Sustainable Finance and Climate Risk
Project Lead: Bardia Monavari, Alice Insights – The aim of this project is to create a comprehensive framework for financial-decision makers to better understand the sources of physical climate uncertainty on real assets.
16 October 2020 | Climate Risk and Sustainable Finance
Project Leads: Yrjo Koskinen, Ari Pandes and Nga Nguyen, Haskayne School of Business, University of Calgary – This project will focus on how to enlarge and improve private equity financing (angel investing, venture capital, private equity) in Canada leading up to a successful exit (green income trusts, initial public offerings (IPOs), industry sales) for technologies that mitigate greenhouse gas emissions.
16 October 2020 | Sustainable Finance and Climate Risk
Project Lead: Caroline Flammer, Questrom School of Business, Boston University – This research will examine whether green bonds could help in financing the transition to a low‐carbon economy.
16 October 2020 | Sustainable Finance and Climate Risk
Project Leads: Mathieu Boudreault, Jean-Philippe Boucher, Département de Mathématiques, Université du Québec à Montréal (UQAM) & Sébastien Raymond, The Cooperators – The P&C insurance industry has various opportunities to increase Canada’s resilience to climate change. This project assesses a potential solution that incentivizes investments in flood-protection measures and retrofitting.
15 October 2020 | Climate Risk and Sustainable Finance
Project Leads: Blair Feltmate, Kathryn Bakos, Daniel Filippi, and Taylor Legere, Intact Center on Climate Adaptation, University of Waterloo – This project will help mortgage providers better understand their exposure to residential flood risk, and means to mitigate residential flood risk.
This research provides insights into the distribution and stability of risk aversion and time preferences, where behavioral biases are taken into account.
The project will help develop a better understanding of how investors react to climate events. As climate change is becoming a more serious problem, we still know little how investors react.
Real Estate Valuation: A Deep Learning Approach The project will help develop a better understanding of real estate values in the Canadian property markets using a sample from Montreal housing market. We also aim to work on the commercial real estate markets to improve our understanding in the commercial markets using a US dataset. The… View Article
Drivers of Successful Pension Investing: Lessons from the Canadian Model The classic model of pension investing faces bleak solvency and funding realities that foreshadow a precarious future and will likely result in defined-benefit (DB) plan obsolescence. Over the past forty years, two factors have seriously attenuated the sustainability of DB plans which provide retirees with… View Article
Decumulation Options for Employer Pension Plan Design: Theory to Practice For years, policymakers, employer pension plan sponsors, consulting professionals, financial advisors, and academics have focused on accumulating retirement wealth. But with Canadian baby boomers now entering retirement – with longer life expectancy, fewer anticipated sources of family support, and a greater dependency on private savings… View Article
Financial Systemic Risk: A Network Approach The Financial Systemic Risk project brought together 5 internationally known researchers to address foundational issues that must be resolved before we can fully understand what makes a resilient financial network. How can stability be measured and managed? How should banks be regulated, and what sticks and carrots should be… View Article
