Market participants are rethinking how they measure and manage risk. Post-crisis banking regulations have had unintended consequences, such as reduced liquidity, as banks move away from their traditional role as market-maker. Given the size of the Fed's balance sheet, new tools will be needed to unwind. With the growing proportion of sovereign debt in negative territory, liability-driven investors are finding it harder to meet future liabilities, and asset managers are moving away from benchmarking to absolute-return strategies. These changes have created additional market distortions and risks. In light of this, what steps are asset managers and banks taking to protect themselves from future shocks? How accurately do valuations adjust for negative interest rates? Are mark-to-market valuations and collateral calls adding a new risk dimension? Can risk actually be reduced, or is it simply shifted? The experts on this panel will dive into the theory and practice of financial modeling and discuss why no model is perfect.
Executive Director, Principal Global Investors; Former Vice President and Treasurer, World Bank
Group Managing Director and Co-Director, Fixed Income, TCW
Managing Director and Head of Strategic Investments, Jefferies Investment Advisers
Nobel Laureate, 1997; Frank E. Buck Professor of Finance, Emeritus, Stanford Graduate School of Business