Generative Artificial Intelligence in Finance: Risk Considerations
After completing this reading, you should be able to: Compare generative AI and traditional AI/ML algorithms. Explain the challenges generative AI systems pose for the financial sector, including those related to data privacy, embedded bias, model robustness, and explainability. Examine…
2023 Bank Failures, Preliminary lessons learnt for resolution
After completing this reading, you should be able to: Evaluate the Credit Suisse case and its implications for the international resolution framework. Evaluate the US bank failures of 2023 and their implications for the international resolution framework. Identify and describe…
Central Clearing 2
After completing this reading, you should be able to: Define a central counterparty (CCP) and describe the mechanics of central clearing. Explain the concept of novation under central clearing. Define netting, multilateral offset, and compression and provide examples of each….
Credit Derivatives
After completing this reading, you should be able to: Describe a credit derivative credit default swap (CDS) total return swap and collateralized debt obligation (CDO). Explain how to account for credit risk exposure in valuing a CDS. Identify the default…
Sovereign Default Risk
After completing this reading, you should be able to: Identify and explain the different sources of country risk. Evaluate the methods for measuring country risk and discuss the limitations of using those methods. Compare and contrast foreign currency defaults and…
Stress-Testing
After completing this reading, you should be able to: Describe the rationale for the use of stress testing as a risk management tool. Identify key aspects of stress testing governance, including choice of scenarios, regulatory specifications, model building, stress-testing coverage,…
