https://www.fintechfutures.com/wp-content/themes/fintech_child/assets/images/logo/fintech-logo.png
  • Home
  • COVID-19
  • News
  • Intelligence
    • Back
    • Analysis
    • Interviews
    • Features
    • White Papers
    • Case Studies
    • Surveys, Reports & Infographics
    • Webinars
    • Podcasts
    • Videos
    • Library
    • Techwire
    • Browse
  • Publications
    • Back
    • Banking Technology Magazine
    • Supplements
    • Daily News at Sibos
    • Subscribe to Magazine
  • Content Hub
    • Back
    • Diversity & Inclusion
    • COVID-19: Industry impact & response
    • Challenger Banks Guide
    • Food For Thought
    • I’m Just Saying
    • Through a Gen Z Lens
    • Vlog: It’s a matter of comms
    • Fintech Agony Uncle
    • Ask The Expert
  • Videos
  • WTF? Podcast
  • Awards
    • Back
    • Banking Technology Awards
    • PayTech Awards
  • Digital Events
  • Advertise
  • Jobs
  • More
    • Back
    • About us
    • Contact us
    • Advertising / Media Kit
    • Banking Technology Magazine Calendar
    • Reports Calendar
    • FinTech Futures Newsletter
    • Events
  • FinTech
  • BankingTech
  • PayTech
  • RegTech
  • WealthTech
  • LendTech
  • InsurTech
  • US Edition
    • Intl. Edition
Banking Technology
  • NEWSLETTER
  • Home
  • COVID-19
  • News
  • Intelligence
    • Back
    • Analysis
    • Interviews
    • Features
    • White Papers
    • Case Studies
    • Surveys, Reports & Infographics
    • Webinars
    • Podcasts
    • Videos
    • Library
    • Techwire
    • Browse
  • Publications
    • Back
    • Banking Technology Magazine
    • Supplements
    • Daily News at Sibos
    • Subscribe to Magazine
  • Content Hub
    • Back
    • Diversity & Inclusion
    • COVID-19: Industry impact & response
    • Challenger Banks Guide
    • Food For Thought
    • I’m Just Saying
    • Through a Gen Z Lens
    • Vlog: It’s a matter of comms
    • Fintech Agony Uncle
    • Ask The Expert
  • Videos
  • WTF? Podcast
  • Awards
    • Back
    • Banking Technology Awards
    • PayTech Awards
  • Digital Events
  • Advertise
  • Jobs
  • More
    • Back
    • About us
    • Contact us
    • Advertising / Media Kit
    • Banking Technology Magazine Calendar
    • Reports Calendar
    • FinTech Futures Newsletter
    • Events
  • US Edition
    • Intl. Edition
  • newsletter
  • FinTech
  • BankingTech
  • PayTech
  • RegTech
  • WealthTech
  • LendTech
  • InsurTech

bankingtech.com

bankingtech.com


Systemic risk a top priority, says DTCC

  • Written by FinTech Futures
  • 13th October 2015

The securities industry is beginning to “think more deeply” about the systemic risk associated with interconnectedness, said Michael Bodson, chief executive of the Depository Trust and Clearing Corporation (DTCC).

The post-trade market infrastructure for the global financial services industry, has released a white paper, Understanding Interconnectednes Risks, that explores the role of interconnectedness in the transmission of risk and offering practical guidelines for risk management professionals. Interconnectedness, or the relationship among economic agents that are created through financial transactions and supporting arrangements, is a key dimension of systemic risk and has become a critical topic for market participants and regulators following the 2008 financial crisis.

“This is a very complex issue,” said Bodson. “If you try to take an all-encompassing view of the many different types of risk, it will be overwhelming.”

The first step to take, he said, was to plot out with whom an institution is connected, the exposure and how risk can be mitigated. A pragmatic approach is needed to what essentially is “inventory”, said Bodson. Some risks an institution can deal with directly, such as by tracking, monitoring and diversifying; but others are inherent and an institution can only understand the risk and be aware of it.

Most research completed to date, said the report, has found that financial networks tend to be robust yet fragile, absorbing shocks up to a certain tipping point and spreading risk beyond this critical threshold.

Regulators have made progress in addressing interconnectedness risks and have adopted an approach that primarily focuses on increasing the resilience of the most interconnected – and most systemically important – financial institutions. Market participants must also assess and respond to this risk. The white paper recommends that market participants take actions, including making a comprehensive inventory of external entities on which they rely and then prioritising and identifying how the failure of an external entity would affect their business in its entirety.

Among the paper’s other key findings:

  • While the importance of network structures in propagating financial shocks is generally recognised, it remains unclear under which circumstances interconnectedness promotes or impairs financial stability;
  • Identifying and assessing interconnectedness risks promotes a broader and deeper understanding of the threats to an organisation; and
  • In line with this comprehensive and inclusive approach, DTCC is working closely with market participants on several initiatives that are designed to mitigate industry-wide interconnectedness risks and proactively address related policy directives.

Andrew Gray, group chief risk officer at DTCC, said: “We believe that incorporating an interconnectedness lens into risk management activities can meaningfully contribute to enhancing

Tags: BankingTech, PayTech Worldwide

Leave a comment Cancel reply

-or-

Log in with your FinTech Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related


  • Video: Top fintech stories this week – 9 April 2021
    Featuring Clubhouse, Stripe, Harlem Capital, Paymob, and WorldRemit founder.
  • ICYMI funding round-up: FinanZero, Hala, Spoko, Cornerstone & more
    Another week and another slew of funding rounds.
  • Real connections in a virtual world: Dock Digital
    Interview with FinTech Futures' Tanya Andreasyan about Dock, the unique roundtable experience.
  • Egyptian fintech Paymob lands country a record $18.5m Series A
    The Series A followed a $350,000 seed raise in 2019.
  • Octobank acquires Earlybase to boost sales and marketing in Europe
    Czeczia-based neobank makes strategic buy.
  • Nomura hires former Barclays exec Jain as new CIO
    Jain spent 13 years at Barclays, leaving as CTO in 2019.
  • The future of the smartphone
    I’m just saying that we have to dream big to bring about disruptive change that benefits everyone.
  • Raising the curtain on embedded finance: the next wave of fintech is here
    Embedded finance brings an entirely new set of players targeting specific segments into finserv.

Related Content

  • Tandem Bank goes live on Mambu core platform
  • Banking Technology April issue out now
  • Ikano Bank picks TruNarrative to sit at regulatory centre of digital change
  • Stripe takes first step into Middle East with UAE expansion

Dock - virtual roundtables

Dock is free to attend for banks and FIs

Click here to register

Sponsorship opportunities available at Dock

Click here for more info

Magazine

Banking Technology April issue out now

8th April 2021

Banking Technology March issue out now

12th March 2021
view all

Webinars

Webinar: Getting to market faster by outsourcing PCI compliance

23rd March 2021

Webinar: Balancing app innovation and cybersecurity in financial services

5th March 2021

Webinar: How to stop massive mobile banking fraud with app security and risk-based authentication

9th February 2021
view all

Reports & Surveys

FinTech Futures Industry Survey & Report 2021

4th March 2021

Report: The power of data analytics in fintech solutions

25th February 2021

Omdia Universe 2020-21: Temenos recognised as a leader for digital banking platforms

15th December 2020

Report: Digital KYB – a springboard to customer onboarding success

30th November 2020
view all

Content Hubs

Diversity & Inclusion Hub

9th April 2021

Dear Luc: your most pressing fintech problems solved by our Agony Uncle

8th April 2021

Vlog: It’s a matter of comms

30th March 2021

COVID-19: industry impact & response

26th June 2020
view all

Podcast

What the Fintech? | S.2 Episode 8 | Bank branches amid COVID-19

8th April 2021

What the Fintech? | S.2 Episode 7 | Class is in session

19th March 2021

What the Fintech? | S.2 Episode 6 | Open banking on the loose

5th March 2021
view all

Videos

Video: Top fintech stories this week – 9 April 2021

9th April 2021

It’s a matter of comms | Episode 3 | ESG

23rd March 2021

Video: Top fintech stories this week – 18 March 2021

21st March 2021

It’s a matter of comms | Episode 2 | Strategy

  • 1
2nd March 2021
view all

White Papers

Embedded insurance: a $3tn market opportunity, that could also help close the protection gap

4th January 2021

White paper: The business value of ServiceNow for retail banks

12th December 2020

E-book: Migration to cloud – your guide to delivering an intuitive customer experience

8th December 2020

White paper: Re-wiring financial services operations for a bold future

7th December 2020
view all

Techwire

Grid Dynamics Launches Cutting Edge Mobile Digital Assistant for Banking

15th April 2021

Synctera Signs on CheckAlt and Socure as Latest Partners to Continue Building out FinTech-as-a-Service Offerings

15th April 2021

BONAFiDEE Launch New ‘Liveness Test’ Strengthening Its Already Highly Secure, Anti-fraud, Visual Biometric Verification Check

15th April 2021

Servus Credit Union climbs to #2 in Canada on Forbes’ World’s Best Banks list

15th April 2021

Quaint Oak Bancorp, Inc. Declares Quarterly Cash Dividend

15th April 2021

Volt Equity Launches Bold New Class of Hyper-concentrated, Options-embedded ETFs Focused on Disruptors

15th April 2021

Paul Kwan Joins General Catalyst as Managing Director

15th April 2021

Insights on the Online Payment Gateways Global Market to 2028 – Size, Market Share, Application Analysis

15th April 2021
view all

Twitter

FinTech_Futures

Box: Insurance isn’t just about premium rates, it’s about the entire user experience process "CEOs are actually st… twitter.com/i/web/status/1…

15th April 2021
FinTech_Futures

"Watershed" @coinbase IPO values it at $99.6bn with shares up 52% on debut fintechfutures.com/2021/04/coinba…

15th April 2021
FinTech_Futures

RT @moorwand: We're back with another Dear Luc on @FinTech_Futures! 👏 This week an anonymous fintech has asked Luc Gueriane: "To give my cu…

15th April 2021
FinTech_Futures

LA fintech @MyEnsembleApp is helping divorced parents navigate their kids’ finances fintechfutures.com/2021/04/la-fin…

15th April 2021
FinTech_Futures

Cuba’s only telco @ETECSA_Cuba granted payment provider licence fintechfutures.com/2021/04/cubas-…

15th April 2021
FinTech_Futures

.@GoldmanSachs settles on Birmingham for second major UK office fintechfutures.com/2021/04/goldma…

15th April 2021
FinTech_Futures

.@TSB partners @ApTapUK to help customers manage bills fintechfutures.com/2021/04/tsb-ta…

15th April 2021
FinTech_Futures

Blockchain firm @Consensys raises $65m from major banks fintechfutures.com/2021/04/blockc…

15th April 2021

Dock: virtual roundtable experience like no other

18-19 May 2021; FREE TO ATTEND

US Challenger banks: who's who & what's their tech

Free to read

FinTech Futures Industry Survey & Report 2021

A deep-dive into the trends defining 2021 and beyond. FREE DOWNLOAD

Free webinar: Getting to market faster by outsourcing PCI compliance

22 April 2021, register today!

Fintech Futures
  • About us
  • Advertise with us
  • Contact us
  • Fintech jobs
  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookies Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X