Enhancing Financial Institution Resilience: Stress Testing for Climate Risks

In an era where climate change poses significant threats to the global economy, financial institutions are increasingly acknowledging the imperative of incorporating climate-related risks into their risk management practices. One fundamental approach for assessing and managing these risks is through the implementation of stress testing. Stress testing empowers financial institutions with a powerful tool to
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CRO series #10 – Risks and opportunities of Large Language Models in Financial Institutions

What are the Risks and Opportunities of using Large Language Models (LLM, i.e. ChatGPT) to Financial Institutions? Welcome to post #10 of the CRO series. The use of LLM (Large Language Models) in financial institutions provides both opportunities and risks to financial institutions. What are those risks and opportunities? Risks to address: 1️⃣ Regulatory Compliance:
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CRO series #9 – third-party risk

🌐 In recent years, third-party risks have become more prominent and critical to manage. Why do you think that is? Below are a few factors that I can think of behind its prominence. Can you think of other factors/reasons? Welcome to post #9 of the CRO series! 1️⃣ Complex and Interconnected Business Ecosystems: In today’s
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CRO series #8 – Model risk management

📢 Chief Risk Officers (CROs) play a crucial role in today’s business landscape, particularly as financial institutions (FIs) increasingly rely on complex models. Model risk management is at the forefront of CROs’ minds. Welcome to post #8 of the CRO series! 🔍 What is a model? A model can be defined as a quantitative method, system, or
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CRO series #7 – Risk Culture

📢 Chief Risk Officers (CROs) play a vital role in today’s business landscape by focusing on building a robust risk culture within their organizations. Welcome to post #7 of the CRO series! ✨ What is Risk Culture?There is no consensus on the definition of Risk culture. However, most definitions agree that risk culture refers to
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The CRO series #6 – Managing third-party risk

Chief Risk Officers of banks and financial institutions are currently paying close attention to third-party risk. Welcome to post #6 of the CRO series. In today’s interconnected world, financial institutions face an array of potential vulnerabilities that can arise from their extensive network of partners, vendors, and service providers. Here are some key considerations for managing
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CRO series #5 – Insights from the 2023 US debt-ceiling crisis

Chief Risk Officers of Banks are currently keeping a close eye on the debt-ceiling crisis in the US. What are the risks banks face in case of a U.S. default? Welcome to post #5 of the CRO series. A recent article by MarketWatch highlights the growing concerns surrounding this issue and sheds light on the
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CRO series #4 – Cyber-risk to financial institutions

As the world becomes more digitized, cyber-risk has become a significant concern for banks and financial institutions. Cyber-attacks have the potential to cause significant financial and reputational damage, and as such, managing cyber-risk has become a top priority for chief risk officers in the banking industry. Welcome to post #4 of the CRO series. There
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CRO series #3 – Climate change risks

How should banks manage climate change risk?
For Chief Risk Officers (CRO) in the banking sector, managing the challenges of climate risk is among their top priorities. Welcome to post #3 of the CRO series. Climate risks can manifest in different forms, such as physical risks like natural disasters, and transition risks such as shifts in policy or market preferences. These risks
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CRO series #2 – Risks from the increase in interest rates

For Chief Risk Officers (CRO) in the banking sector, navigating the current economic landscape is no easy feat. The recent rapid and steep increase in interest rates have added to their concerns. Welcome to post #2 of the CRO series. ▪ The recent increase in interest rates was a necessary measure to combat inflation. However, like
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