General Sessions

General Session I: CROs and Senior Risk Practitioners: Top of Mind Issues

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The 2013 ERM Symposium opening general session comprises three related panel discussions. The first part focuses on the North American insurance industry and will include three chief risk officers sharing their experiences and perspectives on a range of issues. The second part has a broader financial services focus and includes senior risk practitioners from banks, money managers, alternative private equity/hedge funds and nonfinancial corporations. The third part brings all panelists together for a multi-industry/conglomerate discussion on issues such as professional standards, regulatory standards and holding company, multi-jurisdictional and global regulatory (ComFrame, FSB, IAIS, BIS, etc.) issues.

Panelists:
Barry Franklin, Senior Vice President and CRO, Zurich Insurance
Colin Lawrence, Director, Risk Specialists Division, FSA (UK)
Dan Rodriguez, Global CRO for the Systematic Market Marking Group and Americas Equities, Credit Suisse
Michelle McCarthy, CRO, Nuveen
John Rhodes, Chief Risk Officer, Lincoln Financial Group
Mike Angelina, Executive Director, Academy of Risk Management & Insurance, Erivan K Haub School of Business, Saint Joseph’s University

Moderators:
Robert Mark, CEO, Black Diamond Enterprise
Mark C. Abbott, Head of Quantitative Risk Management, Guardian Life
Mark Scanlon, Senior Consultant, Towers Watson

General Session II: Regulatory Reform: Responding to Complexity with Complexity

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Andrew Haldane, executive director of Financial Stability at the Bank of England, recently made a speech at the Federal Reserve Bank of Kansas City’s Jackson Hole Economic Policy Symposium titled “The Dog and the Frisbee” warning that the growing complexity of markets and banks cannot be controlled with increasingly complex regulations. In fact, by attempting to solve the problem of complexity with additional complexity created by increased regulation, we may be missing the mark—perhaps simpler metrics and human judgment may be superior. Furthermore, in attempting to solve a complex problem with additional complexity, we may not have clearly defined or understand the problem. How does ERM fit into the solutions arsenal? Are there avenues left unexplored? Is ERM adding or minimizing complexity?

  • We are drowning in data, but can’t hope to track all the necessary variables, nor understand all or even the most important linkages. Given the wealth of data available, important signals may be lost in the overall “noise.”
  • Unintended consequences maybe lost/hidden in the maze of complexity thereby magnifying the potential impact of future events.
  • The importance of key variables changes throughout time and from situation to situation, so it’s not possible to predict in advance which ones will matter most in the next crisis.
  • We experience relatively few new crises that are mirror images of prior crises, so we really have limited history to learn how to prevent or to cure them.
  • Complex rules incent companies and individuals to “manage to the rules” and seek arbitrage, perhaps seeding the next crisis.

Panelists:

Allan Mendelowitz, Director, Federal Housing Finance Board
Stuart Wason, Senior Director, Office of the Superintendent of Financial Institutions Canada
Matthew Hunter, Deputy Director, Division of Market Oversight Commodity Futures Trading Commission
James Allison, Manager Global Risk, ConocoPhillips
Andrea Danese, Global Head of Data Solutions, Bloomberg

Moderator:
Lori Ramos-Marilla

General Session III: At the Nexus of Strategic and Operational Risk

This will be an informative survey of broad strategic risk issues impacting all industries that use or produce energy, machinery or materials. The companies featured in this session each have more than a century of critical self-reflection to share with you, and their distinguished speakers will describe the latest developments in the strategic landscape affecting them and their stakeholders. Among varied topics, we will learn how ERM minimizes the consumption of time, energy, and materials over the long-term to create shareholder wealth. We will explore how the uncertainty of new regulatory constraints on commodity hedging could increase capital adequacy requirements for many companies. We will see how manufacturers can market long-duration service contracts to transfer operational risks and optimize the replacement timing of fixed capital assets. There will also be a discussion of the long-range uncertainty caused by emerging liability theories associated with greenhouse gas emissions.

Panelists:
James Allison, Manager, Global Risk, ConocoPhillips
Frans Valk, Enterprise Risk Leader, GE Oil & Gas
Lindene Patton, Chief Climate Product Officer, Zurich Financial Services
Moderator:
Thomas Wendling, CH2M HILL

General Session IV: Critical Reflections of the Crisis; International Regulatory Experiences and the Way Forward to a More Robust Financial System

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The great financial crisis has led to the reshaping of national and international financial frameworks, new regulations and a restructuring of financial institutions. Global, regional and national financial stability boards have been set up to mitigate systemic risks and in some countries through the integration of macro policy and supervision. All in all, there have been in excess of 30 new regulations/policy changes including Basel 2.5 and III, Solvency II, Common Reporting (COREP), Dodd Frank (USA), Liikanen (Europe) and Vickers (UK)—all of which have far reaching impacts on capital and liquidity requirements, the business structure of the banking and insurance industries, disclosure, governance and on the resolution of banks.

Three panelists will attempt to draw on their international and national experiences to respond to some of the following questions:

  • Is the crisis more about the failure of risk management within our institutions or the lack of risk standards? More specifically, is the failure due to systems and controls; mispricing identified risks such as risk tendency (expected losses); misidentifying risks; regulatory arbitrage; insufficient capital or other causes not identified?
  • Why did some countries (e.g., Canada, Australia) fare better than others during and after the crisis?
  • Are risk management resources more concerned about managing regulations than assessing risks, given that the regulations are being implemented simultaneously?
  • What is the impact of micro versus macro prudential risk?
  • In the new brave world, what will the banking system really look like? Will there be no international branches? Will we go back to the Glass-Steagall law that separated commercial and investment banking for seven decades? Will institutions be much smaller? Will systemic risk be reduced? Is a Country Risk Officer part of the solution for global financial stability?

Panelists:
Dr. Colin Lawrence, Senior Risk Strategist, Final Services Authority
Dr. Allan Malz, Senior Analytical Advisor, Federal Reserve Bank of New York
John Bilson, Professor of Finance and Associate Dean, Illinois Institute of Technology
Moderator:
Dr. Robert Mark, President, Black Diamond Consulting

General Session V: Interconnectedness and Contagion in Global Markets: Missed Opportunity

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In a rush to formulate rules to address the economic/financial crisis, have regulators misdiagnosed the problem and therefore maybe inadvertently sown the seeds of the next crisis, as well as a false sense of security. In this session, you will hear market participants debate these issues from regulatory and business perspectives. Let’s get to work!

Panelists:
Adam Litke, Chief Risk Strategist and Head of Enterprise Risk Services, Bloomberg
Allan Mendelowitz, Former Director & Chairman Federal Housing Finance Board
James Allison, Manager Global Risk, ConocoPhillips
Stuart Wason, Senior Director, Office of the Superintendent of Financial Institutions of Canada (OSFI)
Matthew Hunter, Deputy Director, Division of Market Oversight Commodity Futures Trading Commission
Moderator:
Lori Ramos-Marilla, LRM Associates