Press Releases

Global Financial System Still on a Knife Edge as Financial Institutions Fail to Replace Inadequate Risk Management Models

Contact
Capco, Enda Joyce, 020 7400 4480, ejoyce@hanovercomms.com
Cass, Amanda Chick, 020 4040 5274, amanda.chick@city.ac.uk
World’s top business and academic leaders convene at Third Annual Cass-Capco Conference on Risk to debate solutions

Despite the recent crisis, financial institutions continue to use outdated or flawed risk management models, creating significant, ongoing risk within the global financial system according to new research published by the Capco Institute. The findings will be discussed at the third annual conference of the Cass-Capco Institute Paper Series on Risk being held on 19 April 2010 at the Cass Business School in London.

The Conference speakers, which include:

  • John Kay, leading British economist and keynote speaker
  • Andrew Procter, Global Head of Compliance, Deutsche Bank
  • David Jessop, Global Head of Equities Quantitative Research, UBS
  • Nicholas Child, Head of EMEA Markets Compliance, Citi

Will address the main findings of the latest issue of The Capco Institute’s Journal of Financial Transformation. The Journal’s conclusions include:

  • Existing quantitative risk management models simply do not work in practice;
  • Unsuitable IT systems and ineffective operations systems are part to blame;
  • There has been little change since the crisis – despite the old models having lead banks to invest in derivatives and other now controversial structured products.

“Our financial system came very close to collapsing, and had it not been for the aggressive and immediate responses from global monetary authorities, many more financial institutions might have buckled under – with dire consequences for the global economy and consumers,” said Rob Heyvaert, Founder and CEO of Capco. “The Cass-Capco Conference on Risk will bring together leading financial experts from around the world to discuss and debate the steps needed to modify these risks and maximise the likelihood of the global financial system recovering sustainably.”

Richard Gillingwater, Dean of Cass, said: “As a major business school specializing in finance and the financial sector, risk and a proper assessment of it is at the heart of much of what we research and teach at Cass. This event brings together risk experts from both academia and industry to determine how financial institutions should learn from and respond to the recent crisis.”

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Notes to Editors
1. For full details of the conference programme, click here.

2. The Journal of Financial Transformation is the only professionally focused scientific journal in finance to be accredited by the American Economic Association and among the 20 journals recommended by the European Finance Association. It has received the APEX Award for Publication Excellence every year since 2002 and has had contributions from 20 Nobel Laureates. The Capco Institute, which publishes the Journal, is ranked among the world’s foremost think-tanks by the Social Science Research Network.

3. About Capco
Capco is a leading global provider of integrated consulting, technology and transformation services dedicated to the financial services industry. Our professionals combine innovative thinking with our unrivalled first-hand industry knowledge to offer our clients consulting expertise, complex technology and package integration, and managed services to move their organizations forward. Through our collaborative and efficient approach, we help our clients successfully increase revenue, manage risk and regulatory change, reduce costs and enhance control. We specialise in banking; capital markets; wealth and investment management; finance, risk & compliance; and technology. We serve our clients from offices in leading financial centres across North America and Europe. To learn more, visit our web site at www.capco.com.

4. About Cass Business School, London
Cass Business School, City University, London, delivers innovative, relevant and forward-looking education, training, consultancy and research. Located in the heart of one of the world’s leading financial centers, Cass is the business school for the City of London. Cass has the largest faculties of Finance and Actuarial Science and Insurance in Europe. It is ranked in the top 10 UK business schools for business, management and finance research and 90% of the research output is internationally significant. Cass is a place where students, academics, industry experts, business leaders and policy makers can enrich each other's thinking. For further information visit www.cass.city.ac.uk.

jailer