"After Lehman's demise, participants in the global financial system could not assess their exposure to Lehman, its subsidiaries, and each other because there was no standard system for identifying counterparties in the maze of subsidiaries and affiliates from which banks, insurers, asset managers, and other market participants transact." McKinsey & Company, The Legal Entity Identifier, October 2017
The Treasury Department issued a report calling for the Labor Department and Treasury to craft proposals on how plan sponsors can get help in assessing the long-term financial strength of annuity providers (Oct 31)
BofA and JPMorgan tussle for top spot as Goldman gains market share (Oct 29)
The Cyber Cafe
Cybersecurity news every Friday
The importance of insurance policies in the wake of a cyber breach
While cyber insurance can be an important tool for recovering some of the losses, other insurance policies may be critically important resources in obtaining more fulsome coverage on a consolidated basis.
SEC details enforcement objectives of new cyber unit
Co-director of the Securities and Exchanges Commission's Division of Enforcement, Stephanie Avakian, outlines the mission and enforcement aims of the regulator's recently formed Cyber Unit and Retail Strategy Task Force.
(Nov 1) -- The Financial Stability Board (FSB) published a report that considers the financial stability implications of the growing use of artificial intelligence (AI) and machine learning in financial services. Their analysis reveals a number of potential benefits and risks that should be monitored as more data becomes available. Some implications:
More efficient information processing (in credit decisions, financial markets, insurance contracts, customer interactions) may contribute to a more efficient financial system.
Applications by regulators and supervisors can help improve regulatory compliance and increase supervisory effectiveness.
New and unexpected forms of interconnectedness between financial markets and institutions.
Network effects and scalability may give rise to third-party dependencies and lead to new systemically important players that fall outside the regulatory perimeter.
Lack of interpretability or auditability could become a macro-level risk; a widespread use of opaque models may result in unintended consequences.
Important to assess in view of risks (adherence to relevant protocols on data privacy, conduct risks, cybersecurity, etc.).
