“No technology is going to replace the inquisitiveness of the regulator”
Mike Bodson, CEO at DTCC, discussing new threats facing the financial system at Sibos 2013, feels that while the global financial community is in a safer environment today, it can ill afford complacency. September 25, 2013 | Wendy WengAs financial institutions struggle to implement reforms aimed at avoiding a repeat of the last financial crisis, it is perhaps dispiriting to discover that they’ll also have to consider the existence and emergence of new, unknown threats, moving forwards. However, that is the reality of today, and one which FIs must quickly ready themselves for, as gaps in protecting against such threats continue to surface, said Mike Bodson, CEO of US post-trade services provider Depository Trust & Clearing Corporation (DTCC) at Sibos 2013. According to DTCC reports, despite considerable progress over the past five years, systemic risks facing the global financial services industry are growing in complexity and are more difficult to anticipate. Several crucial issues that the financial market continues to face include concerns regarding cyber-security, the unintended impact of new regulations and high-frequency trading. “We are in a safer environment, because of the proactive steps taken by the regulators and the markets to strengthen the resilience of the financial system and increase transparency,” said Bodson. “But I wouldn’t necessarily say the system is now more stable. In the last few years, a series of technology glitches have shown the speed at which a problem can occur and be propagated. At the same time, new threats are evolving, particularly in the area of cyber-security. The system has got stronger, but that doesn’t mean it’s riskless.” With so many new risks emerging, as old ones recede, FIs can ill afford complacency. “Having sound basic policies and procedures to withstand shocks and focusing on the impacts not the causes will hopefully make us more resilient. The issue is not what causes the trades to go errant, but what happens when errant trades occur; how quickly can you find them and stop them?” said Bodson. According to Bodson, further investments in both systems and skills will be inevitable as the ... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Operational Risk, Risk and RegulationOprisk,Risk and Regulation, Operational Risk,Risk and Regulation, Keywords:Sibos 2013, DTCC, Mike Bodson, Systemic Risk, Market Risk Sibos 2013, DTCC, Mike Bodson, Systemic Risk, Market Risk
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