Banks Need to Revisit CRO Compensation and Board Risk Committee Composition

The investigation into Wells Fargo’s community banking sales practices, including the role of risk management and the board in these practices, has many in search of questions of what could be learned to mitigate future breakdowns in the flow of information on emerging risk issues to key decision-makers. read more

Lessons in the Dynamics of Risk and Uncertainty

For some time, I have reflected on the dynamics of the firm decision-making process under imperfect information, contemplating how we, as risk managers, can improve our communication with boards and senior leaders — as well as identify the boundaries of our increasingly analytical-driven risk management processes. read more

Risk and Regulatory Insights: The Quest for Integrated Risk Analytics

Financial risk management has witnessed a revolution in advanced analytics over the last 20 years. New analytic techniques combined with quantum leaps in computing power provide risk managers with an array of tools to better measure and manage risks of various types. Integrating analytic capabilities offers great potential for risk managers and their firms; however, it remains an elusive goal for much of the financial industry. read more

Reinsurance Case Study: Reinsurance Company Leverages Javelin Whole Loan (JWL) Platform and Javelin Structured Products (JSP) to Analyze GSE Credit Risk Transfer (CRT) Structures

A reinsurance company was looking to invest in Fannie Mae and Freddie Mac credit risk sharing transactions but did not have expertise in developing analytic models to understand the credit and prepayment risk associated with the underlying collateral. The firm partnered with FBA to leverage the Javelin Whole Loan (JWL) Platform and JSP to generate bids for active deals read more

Trading Case Study: Large U.S Investment Bank Licenses JSP to Optimize Their MBS Trading Desk Operations

The client, a large U.S investment bank, wanted to improve their fixed income trading operations. Their trading desk staff were using multiple systems and manual processes to conduct due diligence on structured products. The client was in need of forward-looking price and yield analytics tools with improved granularity to make more informed trading decisions. Five Bridges approached the client regarding our RMBS analytics platform,Javelin for Structured Products (JSP). read more

Hedge Fund Risk Management Case Study: Hedge Fund Leverages JSP to Conduct Risk Management Analysis

A large hedge fund had expanded its investment strategy to include a range of consumer and commercial loan products and thus needed to enhance its ongoing risk assessment of this growing portfolio. The fund was an investor in both credit and interest rate risk-sensitive structured securities and by using a proprietary set of market models could trade opportunistically across a range of consumer and commercial structured securities in optimizing their exposure to these risks. read more

OTTI Impairment Case Study: Publicly-Traded Investment Bank Leverages JSP Platform for Conducting OTTI Impairment Analysis

A publicly-traded investment bank needed to enhance OTTI impairment analysis on its consumer and commercial structured securities portfolio that included CDOs, and various asset-backed securities and other credit derivatives. Specifically, the complexity of structured securities and the wide range of consumer and commercial product types underlying the securities made the process extremely cumbersome and prone to potential error in estimating whether the company could recover the amortized cost basis of their securities. read more