White Papers
CREATING RISK INTELLIGENCE: TURAZ'S GUIDE TO IMPROVE MARKET TRANSPARENCY AND CREATE A NEW CULTURE OF RISK MANAGEMENT
In response to the crisis, market regulators and participants have embarked in programs to enhance risk management and corporate governance rules. Banks and asset management companies are trying to enhance transparency at every level of their organizations, while the regulators face the daunting task to implement stricter rules without impeding innovation or business growth.
The task is complicated by the incredible diversity of financial instruments which result from fast pace innovation, by the difficulties of valuation of complex or illiquid products and by the lack of substance behind some of the valuations. The multiplication of regions economically active, the emergence of new markets and the fragmentation of liquidity pools compound the issue: As a result, the financial industry needs a new definition of market efficiency.
Turaz believe that is essential that the financial industry establishes a culture of transparency to support a dynamic approach to risk management, to restore confidence and to open new perspectives to the regulators. Turaz therefore recommends a new approach, reconnecting with some of the fundamental principles of risk management, by privileging consensus based estimations versus modelling and enabling fast dynamic reporting of exposure and sensitivity. The aim is to be able to synthesize activities without creating uniformity.
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