31 January 2022  |  Risk Management Practices

This paper presents the results of the latest survey. Key findings on priority risk issues facing the Canadian financial system and its financial institutions are first discussed. It is followed by perceptions of our members on the global economic outlook. The report concludes with risk insights drawn from this year’s survey with which we aim to inspire our audience when thinking and planning forward.

25 January 2022  |  Risk Management Practices

 This paper addresses Reinforcement Learning (RL) in finance and discusses the implementation issues for financial institutions who want to employ RL in their business.

14 October 2021  |  Risk Management Practices

Evolving societal trends and recent events point to the clear need for financial institutions to focus on diversity, equity and inclusion (DEI).

19 August 2021  |  Risk Management Practices

This executive note briefly examines a number of different types of liabilities that may arise for financial institutions, provides illustrative case examples, and offers ideas for effective governance.

31 May 2021  |  Risk Management Practices

The last decade has witnessed a large-scale adoption of machine learning tools in finance. According to the latest report  by Refinitiv, the number of data science teams in financial services firms have risen by more than 260 per cent since 2018 (see Refinitiv 2020).

6 May 2021  |  Risk Management Practices

In this paper, we assess the disruptive transition in geopolitics, from a multilateralist and interconnected world to an emerging paradigm of “Splintered Integration.” In this emerging paradigm, state competition overlays and even pushes back against globalization. Economic interconnectivity remains deep but uneven, with greater restrictions in some domains than in others.

29 March 2021  |  Risk Management Practices

Today, approximately 20 per cent of the financial information used in making investment, lending and capital allocation decisions is prepared in accordance with generally accepted accounting principles (GAAP). 

9 March 2020  |  Risk Management Practices

In response to the fast-changing conditions and expectations in today’s financial markets, risk leaders need to be more proactive than ever before. We have entered the era where leaders will not be able to access the C-suite or board if they haven’t had a stint in risk management.

17 January 2020  |  Risk Management Practices

This marks the fourth year we have conducted the Risk Outlook Survey. The results provide key insight into risks to the Canadian financial system, views on Canada’s financial stability & global economies.

27 November 2019  |  Risk Management Practices

Chief Risk Officers are constantly asked this question. However, it’s not just CRO’s or their executive management teams, that should have trouble sleeping. With an ever-increasing focus on governance, board of directors must focus on risks, traditional and emerging, that could impact the health and stability of their organizations.

27 November 2019  |  Risk Management Practices

Even the most casual observer will notice that newspaper headlines continue to be fueled by a steady stream of corporate scandals, malfeasance, and other assorted conduct and risk management “missteps”. A commonly recurring theme in much of the ensuing narrative and analysis is that these events are often directly attributable to some form of material “failure of (risk) culture”. In this paper, we explore a working definition of a “strong risk culture” as a guide to identify key management practices and conditions that can often play a critical role in shaping an organization’s risk culture.

1 May 2019  |  Risk Management Practices

The Global Risk Institute, in partnership with the Conference Board of Canada and the Chartered Professional Accountants of Canada, has conducted a benchmarking survey of enterprise risk management (ERM) practices across different industries. In the foreword, we highlight ERM practices in the financial services industry and discuss how they compare to other industries’ practices.

7 January 2019  |  Risk Management Practices

2018 marks the third year of the Global Risk Institute’s Annual Risk Outlook Survey of our member organizations’ risk outlooks for the coming year. The results of this survey provide insights into our members’ views on key risks, on the stability of their individual institutions and the overall Canadian financial system, and on the strength of major global economies. Survey responses were obtained from a range of financial institutions including banks, insurance companies, and pension funds.

6 December 2018  |  Risk Management Practices

Are Emerging risks foreshadowing a Systemic Risk Event? In this paper, we do a comparison of the GRAFT matrix over several years to gain insight into potential systemic changes that may be on the horizon.

19 November 2018  |  Risk Management Practices

This article focuses on the challenge of changing organizational and sub-unit cultures to better manage the many forms of cultural risk (see sidebar) and thereby improve organizational performance. We propose that a focus on key character dimensions in all employees, but specifically those in risk leadership roles, will result in accelerated culture change, improved risk management and better organizational outcomes.

27 August 2018  |  Risk Management Practices

The trend of increasing Cyber Dependency has been highlighted by the World Economic Forum as one of the most impactful trends changing society today. Organizations must be able to view digital innovations and their dependency on them in a systematic way to truly visualise that which is a threat and that which may signal opportunity.

7 August 2018  |  Risk Management Practices

This paper explores how firms can benefit by exploring stress testing to examine a wide array of issues. Additionally, Mr. Talwar and Mr. Turnbull explore the value of stress testing to senior executives, board members and probably most particularly to the Risk Management Committee. The authors conclude with the Top 10 Questions Board members should consider when reviewing stress scenarios with Senior Managements.

23 May 2018  |  Risk Management Practices

This article is the first in a series that will focus on applying risk correlations to further a robust approach to the management of emerging risks. It applies the correlation matrix from the Global Risks and Trends Framework (GRAFT) to a specific topic in order to highlight risk interdependencies, and to assist in the analysis of strategic implications.

23 May 2018  |  Risk Management Practices

Investors are often encouraged by financial advisors to “roll-over” their 401(k) into Individual Retirement Accounts (IRAs). This work investigates the soundness of this investment advice and analyzes the diversification of large 401(k)-type plans that offer five basic investment options.

22 March 2018  |  Risk Management Practices

The Pension Case Study provides the overview of the concept of the Global Risk and Trends Framework (GRAFT). This report provides the process, implementation, and outputs of the GRAFT process.

22 March 2018  |  Risk Management Practices

The role of the board has expanded and expectations for performance have increased. This report we emphasize that the most important role of the board is risk governance, and we provide insight to how directors can more effectively oversee risk taking activities.

8 March 2018  |  Risk Management Practices

ARTICLE – The focus today is to develop risk managers so that they can acquire a breadth of experience across multiple risk disciplines. Traditional risk capabilities such as credit and market risk are still necessary; however, these skills are no longer sufficient on their own.

31 January 2018  |  Risk Management Practices

This year marks 2nd years GRI has conducted their Risk Outlook Survey to assess the risk outlook of our member organizations for the coming year. The results of this survey provide insights into our members’ views on key risks, the stability of the Canadian financial system, and the strength of major global economies.

19 January 2018  |  Risk Management Practices

In many organizations, across many industries, the most vital opportunities to drive growth, as well as the most pressing risks, start with people.

6 December 2017  |  Risk Management Practices

GRAFT – The Global Risks and Trends Framework – is a new and innovative approach designed to help organizations identify, assess and respond to global risks and trends in order to avoid pitfalls that could threaten an organization’s long-term survival. This Government Case study provides the process, implementation, and outputs of GRAFT.

16 October 2017  |  Risk Management Practices

GRAFT – The Global Risks and Trends Framework – a new and innovative approach designed to help organizations identify, assess and respond to global risks and trends in order to avoid pitfalls that could threaten an organization’s long-term survival, or conversely to leverage for the benefit of the organization.

25 July 2017  |  Risk Management Practices

This paper includes an examination of the risks associated with continuation of the workplace gender gap, and the rewards for firms that achieve gender diversity. It makes a case for dedicating a portion of parental leave exclusively for men, on the basis that gender equality at home is a prerequisite for gender equality at work. Other recommended actions to foster gender equality are also included.

10 July 2017  |  Risk Management Practices

A Comparison of Survey and Incentivized-Based Risk Attitude ElicitationAuthors: Jim Engle-Warnick, Diego Pulido, and Marine de MontaignacRelated Project: Behavioral FinanceThe Global Risk Institute funded this research along with the preparation of this paper.Download Summary: EXECUTIVE SUMMARYOne of the duties of financial advisors is to assist investors with building a portfolio that fits their needs and preferences. An… View Article

19 June 2017  |  Risk Management Practices

The cost of natural disasters is a major risk for insurers. Recent examples of major catastrophic events, and the associated losses, include Hurricane Katrina ($84 billion), the 2008 Sichuan earthquake ($148 billion), the 2011 Tohoku earthquake and tsunami in Japan (more than $300 billion) and Hurricane Sandy ($75 billion).

23 March 2017  |  Risk Management Practices

Campbell Harvey`s presentation on New Approaches to Performance Evaluation at the International Centre of Pension Management (ICPM).

28 February 2017  |  Risk Management Practices

Variable annuities have been used as a payout mechanism in some US pension plans that are qualified under the U.S. Internal Revenue Code for many years. This innovative payout technique has also been introduced in a large pension plan in British Columbia that is registered under the Canadian Income Tax Act. Under this technique, the registered pension pl an establishes a “hurdle rate”.

21 February 2017  |  Risk Management Practices

Illiquidity Premia in the Equity Option MarketRelated Project: Risk Management & Market LiquidityAuthors: Peter Christoffersen, Ruslan Goyenko, Kris Jacobs, and Mehdi Karoui .The Global Risk Institute funded this research along with the preparation of this paper. This paper is a summary of the larger research report“Illiquidity Premia in the Equity Option Market”.GRI members can download the full… View Article

9 December 2016  |  Risk Management Practices

Initial Perspectives on 2017 – This view is consistent with the consensus of our members, who participated in our key risk survey. Not surprisingly members identified Consumer Debt / Canadian Housing Market, Rising Interest Rates and Cyber Risk amongst their top concerns for 2017.

25 October 2016  |  Risk Management Practices

Risk Management in the Middle East Presentation by Frank MasseyFrank Massey, Vice President and Head of Risk Management with Riyad Bank, speaks on the Opportunities and Challenges of Managing Risk as an Expatriate. Gain insights and lessons learned from a Canadian expatriate in building a risk management department from ground zero. Find out what you can do… View Article

21 September 2016  |  Risk Management Practices

Delta hedging is an important way in which traders manage the risk in a portfolio of options. This article discusses those options.

16 November 2015  |  Risk Management Practices

Investment Behaviour in the Laboratory Related Project: Behavioural Finance Preliminary  for GRI Working paper  November  16,  2015 Abstract This paper is an experimental study of dynamic investment decisions. The  goal  of  the  experiment  is  to  test  theoretical  predictions of the effect of human capital on investment. Subjects make repeated portfolio allocation decisions, allocating their money between… View Article