Without innovation the world stagnates and this is as true in financial markets as anywhere else, however I sense that people are starting to feel a little overwhelmed by the continued fintech revolution – there are, some people suggest to me, just too many ideas out there at the moment and identifying the good ones […]
Tag: Operational risk
Following last week’s column I am obviously in the bad books of a small number of buy side firms and as such I intend, in true fashion, to dig myself in a little deeper today. There is a trend in the buy side, indeed business generally, that makes peer-to-peer matching on any reasonable scale even […]
I have been quite vocal in recent weeks about the need for responsibility in financial markets generally and in particular have expressed the opinion (which has not gone down that well I will confess) that unless there are specific circumstances, for example, a bilateral trade on a private venue where both parties agree it was wrong, we should never consider re-papering trades. It is now time to take a different perspective on this, although I hasten to add I have not changed my mind – “always certain”!
Today’s column comes with an apology to Labradors the world over – proof that my readership is made up of nothing if not animal lovers. Away from the unintended slight on man’s best friend, I am bothered by yet another example of what I consider to be weak operational practice. Technology, data and analytics are all good, but they can’t be left to their own devices – someone has to “own” them and either monitor them adequately or take responsibility when things go wrong.
To channel my inner Shakespeare, “to re-paper or not re-paper – that is the question”. I could continue with something like, “whether ‘tis nobler in the mind to stand by the price and wear the loss, or run crying to the authorities and try to get it cancelled” but that kind of loses poetic effect. Anyway, what I want to say is why do markets let people get away with rank stupidity and lack of operational discipline by letting them re-paper trades?
In its latest assessment of the European banking system, the European Banking Association highlights the threat posed by technological advances, outsourcing and data protection.
The results of a risk assessment questionnaire show operational risks remain an area of concern given the challenges EU banks have to face with the rapid development of financial technologies. Based on the questionnaire results, 55 % of respondents foresee an increase in operational risk in their bank compared to 43 % in December 2016 and 35 % in December 2015.
The Monetary Authority of Singapore (MAS), has directed the Singapore Exchange (SGX) to implement measures to enhance its recovery processes and operational resilience.
The directive comes after a supervisory investigation into the trading disruption that occurred in the market on 14 July 2016. The measures include recommendations by the Industry Working Group (IWG), which comprises SGX and industry stakeholders.
SGX will contribute $1.5 million to co-fund the costs that may be incurred by brokerage firms to implement the IWG measures.