We emphasize and encourage links between academic researchers and practitioners at financial institutions to bring theoretical techniques to bear on real-world issues.

Risk Management Practices

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.

Addressing Culture and its Associated Risks in Financial Institutions

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.

Digital Technology: Promise or Peril?

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.

Extracting Value from Stress Testing

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.

GRAFT: Cyber Risk Correlations in the GRAFT Framework

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.

Conflicted Advice About Portfolio Diversification

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.

GRAFT: Pension Case Study

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.

Risk Governance: Evolution in Best Practices for Boards

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.

What Makes a Good Risk Manager?

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.

GRAFT Case Study: Government of Canada

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.

GRAFT: A Global Risks and Trends Framework – Overview

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.

Mind the Gap: Addressing Gender Imbalances in Leadership (and a Case for Paternity Leave)

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.

A Comparison of Survey and Incentivized-Based Risk Attitude Elicitation

A Comparison of Survey and Incentivized-Based Risk Attitude Elicitation Authors: Jim Engle-Warnick, Diego Pulido, and Marine de Montaignac Related Project: Behavioral Finance The Global Risk Institute funded this research along with the preparation of this paper. Download Summary:  A Comparison of Survey & Incentivized Based Risk Attitude Elicitation EXECUTIVE SUMMARY One of the duties of financial… View Article

CAT Bond – Premium Spreads

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).

New Approaches to Performance Evaluation

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

An Improved Application of the Variable Annuity

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”.

Illiquidity Premia in the Equity Option Market

Illiquidity Premia in the Equity Option Market Related Project: Risk Management & Market Liquidity Authors: Peter Christoffersen, Ruslan Goyenko, Kris Jacobs, and Mehdi Karoui SUMMARY-Illiquidity-Premia.pdf . 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”…. View Article

Summary of Key Risks in 2017

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.

Enterprise Risk Management Roadmap: GRI Program Overview

One of our primary goals has been to improve risk management in the financial services sector through enterprise risk management (ERM) education and training. In order to advance this important goal, Global Risk Institute is launching a comprehensive ERM Roadmap program initiative to contribute to this important ERM practice area.

Risk Management in the Middle East

Risk Management in the Middle East  Presentation by Frank Massey Frank 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… View Article

Optimal Delta Hedging for Options

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

Investment Behaviour in the Laboratory

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

Enterprise Risk Management: How do we govern it?

A collection of essays by leading risk management practitioners key risk governance-related themes, such as governance structures, risk culture, risk policies, risk/strategy alignment, risk capacity, risk appetite, and risk identification and measurement.

Hedging and Risk-Return Frontier: an ALM Perspective

Hedging and Risk-Return Frontier in Insurance: an ALM Perspective Asset-Liability Management (ALM) attempts to manage the underlying risk from mismatches between assets and liabilities that arise from fluctuations in the financial landscape. This project creates an ALM strategy for insurance companies that will account for demographic and financial risk while controlling for model risk. This… View Article

Risk Management & Market Liquidity

Risk Management & Market Liquidity  This project focuses on liquidity risk management and its integration with other types of risk, including market and credit risk, from two perspective. The first perspective is that of a financial institution. Here the researchers focus on incorporating liquidity risk in derivatives pricing models, funding value adjustment in derivatives valuation… View Article

Behavioral Finance

Behavioural Finance This project uses the tools of modern finance and risk management to measure and model environmental risks.  Environmental risks can be thought of as long run risks which naturally influence portfolio decisions including insurance.  This study examines publicly traded environmental portfolios and develops portfolios which will be published on the widely viewed and… View Article