07.25.2016
By John D'Antona Editor, Traders Magazine

Connecting the Dots: How DTCC Manages Contagion Risks (by Andrew Gray, DTCC )

07.25.2016 By John D'Antona Editor, Traders Magazine

Andrew Gray, DTCC Managing Director and Group Chief Risk Officer, offers recommendations for managing the risk of interconnectedness in his article which first appeared in the June 2016 issue of Risk.net.

As the Lehman Brothers bankruptcy in 2008 demonstrated, the failure of one highly interconnected entity can spread rapidly across the global financial system and have a devastating impact on financial stability. The level of financial interconnectedness cannot be overstated. Banks and other financial institutions are linked through intermediation chains that span the globe, creating an elaborate web of mutual interdependencies.

“Addressing interconnectedness risks is a work in progress that will continue to evolve as our understanding of the underlying dynamics matures,” Gray said. “As such, it represents the logical next step in the evolution of an organization’s risk management capabilities.”

To read the full article, click here.

Related articles

  1. Trading Europe From ‘Across the Pond’

    Status grants clearing members clarity on the regulatory treatment of their exposures to OCC.

  2. The clearinghouses will be using a VaR methodology.

  3. Auerbach Grayson Launches U.S. Equities Trading Business
    Daily Email Feature

    FTX US Boosts Equities Business

    The US regulated cryptocurrency exchange has acquired Embed Clearing.

  4. BIS Warns on Asset Management

    'Crypto carnage’ has shown how meaningful protections for investors, markets, and the public are needed.

  5. Banks' Risk Management Seen as Lagging

    The enhanced margining model strengthens resilience and boosts capital efficiency.