It is clear that one of the most severely affected sectors is the global aviation sector. How will this go and how far will the government’s financial aid go to keep the strategically important airlines figuratively and literally in the air? Not to mention the measures that are likely to come our way. A valid passport and a paid flight ticket will no longer be a guarantee that you can get on board a flight. And will half of the passenger seats disappear to the cargo hold soon? Food for thought for trend watchers, doomsday prophets and economists, but for now the hard reality is that about 90 percent of the fleet of many airlines is parked neatly on the ground. We will go through the situation with you of any airline we know, KLM, but what is mentioned below may apply to any other airline. Continue reading…

ECB’s President Mario Draghi and Vice President Luis de Guindos announced that: “Based on our regular economic and monetary analyses we have conducted a thorough assessment of the economic and inflation outlook, also taking into account the latest staff macroeconomic projections for the euro area. As a result, the Governing Council took five decisions in pursuit of its price stability objective.”

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Forward guidance, i.e. communication by a central bank about the likely future path of interest rates, usually reduces uncertainty. But it matters how this is done in practice, because forward guidance with a short time horizon can raise uncertainty. This occurs if the forward guidance impairs the aggregation of private information in financial markets, thus making market prices less informative. Central banks often make statements about the likely future path of interest rates by providing so-called forward guidance. Forward guidance is especially used if the central bank can no longer cut policy rates because they are already as low as possible (i.e. they have reached their lower bound). Continue reading…

Aligning operational risk management (ORM) with strategy could enable strategic change, improve business performance and enhance customers’ experience for financial institutions. However, only half of firms surveyed with less than $250 billion in assets leverage ORM to challenge business models, according to a report by KPMG LLP and The Risk Management Association (RMA).
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Information which might constitute business secrets loses, generally, its secrecy when it is at least five years old Mr Ewald Baumeister is one of the investors who suffered loss due to the activities of the German company Phoenix Kapitaldienst, whose business model took the form of a Ponzi scheme. Insolvency proceedings having been initiated against Phoenix in the course of 2005 that company has been dissolved and is now in judicial liquidation.
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The European Securities and Markets Authority (ESMA) published the priorities to be considered by listed companies, and their auditors, when preparing and auditing their 2017 financial statements. These priorities are set out in the annual Public Statement on European Common Enforcement Priorities (Statement), through which ESMA promotes the consistent application of the International Financial Reporting Standards (IFRS).
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We talk a lot about risk appetite, but what does it mean in practice? That was the question posed by Airmic deputy CEO Julia Graham at the Cambridge risk summit. The event also heard from a leading academic that knowledge is an often-neglected area of risk management.

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by Philipp Härle, Andras Havas and Hamid Samadari

Banks have made dramatic changes to risk management in the past decade—and the pace of change shows no signs of slowing. Here are five initiatives to help them stay ahead. Risk management in banking has been transformed over the past decade, largely in response to regulations that emerged from the global financial crisis. But we believe it could be set to undergo even more sweeping change in the next decade. Indeed, while risk-operational processes such as credit administration today account for some 50 percent of the function’s staff, and analytics just 15 percent, by 2025 those figures could be around 25 percent and 40 percent respectively. Continue reading…

With the launch of euro zone quantitative easing on January 22, European Central Bank President Mario Draghi hopes to have delivered on his pledge to do “whatever it takes” to safeguard the region’s prospects. It was not quite a design classic but it was a feat of engineering nevertheless. The quantitative easing programme unveiled by ECB President Mario Draghi on last Thursday was – save for a few missing components – a pretty impressive machine. Continue reading…

The Swiss National Bank recently scrapped its CHF/EUR currency peg in an unexpected move that roiled financial markets. Here, we explain what may have been behind the move and its implications. What did the Swiss National Bank do and what was the reaction in the financial markets ? The SNB abandoned the CHF’s exchange rate peg against the EUR, which had been set at EUR1.20 since September 2011. The CHF rallied sharply in response to the move, gaining as much as 40 per cent against the EUR at one point, and hitting its highest level against the USD in three years. Such volatility is extremely rare in G-10 currencies. Continue reading…