Risk Inn

🌍𝐖𝐡𝐚𝐭 𝐢𝐬 𝐑𝐢𝐬𝐤 𝐈𝐧𝐧 𝐚𝐥𝐥 𝐚𝐛𝐨𝐮𝐭? Our founder Ripul D. shares the vision behind Risk Inn and how we’re redefining the landscape for Risk Management professionals 🤝 𝐖𝐡𝐚𝐭’𝐬 𝐨𝐮𝐫 𝐦𝐢𝐬𝐬𝐢𝐨𝐧? Our comprehensive network goes beyond traditional hiring platforms, recruitment agencies, or certification coaching institutes. We’re building a global, dynamic community where aspiring Risk professionals can thrive, and employers can confidently find the talent they need. 𝐇𝐨𝐰 𝐝𝐨 𝐰𝐞 𝐟𝐨𝐬𝐭𝐞𝐫 𝐠𝐫𝐨𝐰𝐭𝐡? We connect Risk Managers and Aspirants across US, India, Europe, Africa, Australia, and South America, celebrating diversity while promoting professional development. Our tailored approach helps individuals identify and develop their skills, guiding them to the right opportunities. 𝐖𝐡𝐚𝐭 𝐫𝐞𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐝𝐨 𝐰𝐞 𝐩𝐫𝐨𝐯𝐢𝐝𝐞? Join our FREE Exclusive Global Careers Club (GCC) and Certification communities! Enjoy daily knowledge polls, insightful articles on FRM, SCR, and RAI, plus unique job postings. 💼 𝐇𝐨𝐰 𝐝𝐨 𝐰𝐞 𝐬𝐮𝐩𝐩𝐨𝐫𝐭 𝐞𝐦𝐩𝐥𝐨𝐲𝐞𝐫𝐬? Our platform helps organizations find not just qualified candidates, but individuals with the essential skills and mindset to drive innovation. We’re committed to shaping a brighter future for both talent and organizations. 𝐓𝐨𝐠𝐞𝐭𝐡𝐞𝐫, 𝐥𝐞𝐭’𝐬 𝐫𝐞𝐯𝐨𝐥𝐮𝐭𝐢𝐨𝐧𝐢𝐳𝐞 𝐭𝐡𝐞 𝐑𝐢𝐬𝐤 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝 𝐚 𝐛𝐞𝐭𝐭𝐞𝐫 𝐩𝐥𝐚𝐜𝐞 www.riskinn.com 💡 𝐏𝐫𝐨 𝐓𝐢𝐩: Our Exclusive Global Careers Club (GCC) offers a professional space and unique career opportunities for Risk Professionals! 👉 Join 𝐆𝐥𝐨𝐛𝐚𝐥 𝐂𝐚𝐫𝐞𝐞𝐫𝐬 𝐂𝐥𝐮𝐛 on WhatsApp: https://shorturl.at/MeAdw  👉 Join 𝐅𝐑𝐌 1&2 Community on WhatsApp: https://shorturl.at/uajnu 𝐑𝐞𝐚𝐝𝐲 𝐭𝐨 𝐢𝐧𝐯𝐞𝐬𝐭 𝐢𝐧 𝐲𝐨𝐮𝐫 𝐜𝐚𝐫𝐞𝐞𝐫?  Sign-Up for our expert Mentorship Now https://bit.ly/3Bzyd4W ✨ Limited Spots Available! #riskmanagement #careergrowth #globalcommunity #marketrisk #creditrisk #operationalrisk #liquidityrisk #finance #financialriskmanagement #frm #scr #rai #basel3 #jpmorgan #ey #goldmansachs #big4 #consulting #riskinn

Will be having a chat with Ripul D. on some broad risk management topics.

🏁 𝗥𝗶𝘀𝗸 𝗠𝗮𝗻𝗮𝗴𝗲𝗿 𝗖𝗵𝗲𝗰𝗸 𝗣𝗼𝗶𝗻𝘁 🏁 Test your skills with our quick 𝑷𝒐𝒍𝒍 𝒂𝒔 𝒚𝒐𝒖 𝑺𝒄𝒓𝒐𝒍𝒍! Challenge yourself & gain expert insights by joining our FREE and Exclusive WhatsApp & GroupMe Global communities for expert insights, career opportunities, FRM 1 & 2 prep, and more 🚀 Our Exclusive Global Careers Club (GCC) offers a professional space with daily polls, articles on FRM, SCR, and RAI, and unique career opportunities for Risk Professionals! 👉 Join 𝐆𝐥𝐨𝐛𝐚𝐥 𝐂𝐚𝐫𝐞𝐞𝐫𝐬 𝐂𝐥𝐮𝐛 on WhatsApp: https://shorturl.at/MeAdw 👉 Join 𝐅𝐑𝐌 1&2 Community on WhatsApp: https://shorturl.at/uajnu Want to receive expert guidance for landing your dream job? https://bit.ly/3CbaJDC

𝐀 𝐂𝐨𝐦𝐦𝐞𝐧𝐭𝐚𝐫𝐲 𝐨𝐧 𝐈𝐅𝐑𝐒 9 𝐰𝐢𝐭𝐡 𝐒𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧𝐬 𝐟𝐨𝐫 𝐅𝐮𝐭𝐮𝐫𝐞 𝐑𝐞𝐬𝐞𝐚𝐫𝐜𝐡 This recent publication in Accounting in Europe explores the post-implementation effects of IFRS 9 on the classification and measurement of financial instruments. The authors critically assess its conceptual framework, empirical evidence, and offer recommendations for improving its application. Their study highlights the importance of ongoing enhancements in financial reporting standards to achieve a balance between relevance, reliability, and global comparability. 🔍 𝐃𝐢𝐬𝐭𝐢𝐧𝐜𝐭 𝐂𝐨𝐧𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐏𝐚𝐩𝐞𝐫 The paper focuses on issues raised during IFRS 9's Post-Implementation Review (PIR) and evaluates its impact on accounting practices and comparability in financial reporting. 💡 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 𝐖𝐢𝐭𝐡𝐢𝐧 1. 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐌𝐨𝐝𝐞𝐥 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬: The study highlights that it is crucial to distinguish between business model and management intent to improve financial reporting clarity and avoid inconsistencies in classification. 2. 𝐂𝐨𝐦𝐩𝐚𝐫𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐯𝐬. 𝐑𝐞𝐥𝐞𝐯𝐚𝐧𝐜𝐞: The authors explores how IFRS 9 allows divergent treatments of similar assets, reducing comparability between entities. They suggest striking a balance between comparability and relevance is vital to ensure that financial statements are both useful and comparable across entities. 3. 𝐒𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲-𝐋𝐢𝐧𝐤𝐞𝐝 𝐈𝐧𝐬𝐭𝐫𝐮𝐦𝐞𝐧𝐭𝐬: The study examines challenges in applying SPPI tests to ESG-linked assets, encouraging broader adoption of fair value accounting. 4. 𝐅𝐚𝐢𝐫 𝐕𝐚𝐥𝐮𝐞 𝐓𝐫𝐞𝐚𝐭𝐦𝐞𝐧𝐭: The authors Propose harmonizing the treatment of fair value changes, eliminating OCI options for specific equity instruments to reduce complexity and earnings management risks. 𝐎𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐢𝐞𝐬 𝐟𝐨𝐫 𝐅𝐮𝐫𝐭𝐡𝐞𝐫 𝐒𝐭𝐮𝐝𝐲 The study recommends refining asset classification, especially for ESG-linked instruments, and improving fair value accounting across sectors. It also calls for clearer credit risk and impairment models, while balancing comparability and relevance in IFRS 9’s application. Major thanks to the authors for their valuable insights on the future of IFRS 9 and financial reporting. Source: https://shorturl.at/Gf5XQ 💡 Pro Tip: Join the discussion in global community of risk professionals! 𝗦𝘁𝗮𝘆 𝗜𝗻𝗳𝗼𝗿𝗺𝗲𝗱 𝗮𝗻𝗱 𝗖𝗼𝗻𝗻𝗲𝗰𝘁𝗲𝗱 🤝 https://bit.ly/4dXIc2h (𝘞𝘦 𝘝𝘦𝘳𝘪𝘧𝘺) #ifrs9 #riskmanagement #fairvalueaccounting #esg #financialreporting #riskassessment #creditrisk #sustainabilitylinked #financialinstruments #impairmentmodels #financialstandards #accountingframework #frm #cfa #scr #rai #garp #financialstability #financialanalysis #riskmodeling #accountingresearch #financialtransparency #futureoffinance #ifrs9implementation #financialriskmanagement #riskinn

𝐆𝐥𝐨𝐛𝐚𝐥 𝐓𝐫𝐞𝐧𝐝𝐬 𝐢𝐧 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐑𝐢𝐬𝐤 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭: 𝐒𝐤𝐢𝐥𝐥𝐬 𝐍𝐞𝐞𝐝𝐞𝐝 𝐟𝐨𝐫 2024 & 𝐁𝐞𝐲𝐨𝐧𝐝 The landscape of financial risk management is rapidly evolving, and staying ahead of the curve is essential. Join us for an insightful webinar, where we shed light on the tools, competencies, and strategies shaping the future of Risk Management. 𝘞𝘩𝘰 𝘠𝘰𝘶'𝘭𝘭 𝘔𝘦𝘦𝘵 𝘢𝘵 𝘵𝘩𝘦 𝘞𝘦𝘣𝘪𝘯𝘢𝘳 🗣️ Host: Mr. Ripul Dutt, Founder, Risk Inn 🎤 Guest Speaker: Mr. Gabriel Ryan, Vice President, DBS Bank Singapore Our Guest Speaker, a seasoned leader in financial services with a wealth of experience across banking, wealth management, securities, and insurance, will share his insights into the key trends transforming risk management. With expertise in credit risk, advanced data analytics, and a history of working alongside senior leaders, he brings a unique perspective to the challenges and opportunities in the financial sector. This is a must-attend for anyone eager to understand how risk management is evolving and how you can stay ahead in a data-driven world. Whether you’re embarking on your journey in risk management or looking to sharpen your strategic insight, this session will provide invaluable guidance. Don’t miss out, register now to equip yourself with the knowledge and skills necessary for 2024 and beyond. 𝐑𝐞𝐠𝐢𝐬𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐋𝐢𝐧𝐤: https://shorturl.at/v2ZEc 👉 Join 𝐆𝐥𝐨𝐛𝐚𝐥 𝐂𝐚𝐫𝐞𝐞𝐫𝐬 𝐂𝐥𝐮𝐛 https://shorturl.at/MeAdw (𝘞𝘦 𝘷𝘦𝘳𝘪𝘧𝘺) Ripul D. Gabriel Ryan, FRM Amey Tawde Global Careers Club (GCC) Avadhoot Muli Umar Siddiqui Aman Sharma #riskmanagement #creditrisk #datadriven #riskanalytics #riskstrategy #fintech #banking #financecareers #riskassessment #financialservices #riskmitigation #financialplanning #cyberrisk #operationalrisk #regulatorycompliance #frm #cfa #scr #riskcontrols #marketrisk #enterpriserisk #financialmodeling #riskframework #riskmanagementsolutions #dataanalytics #financeriskmanagement #riskprofessionals #riskinn

𝐑𝐞𝐚𝐜𝐭𝐢𝐯𝐞 𝐭𝐨 𝐏𝐫𝐨𝐚𝐜𝐭𝐢𝐯𝐞: 𝐄𝐱𝐩𝐥𝐨𝐫𝐢𝐧𝐠 𝐂𝐨𝐮𝐧𝐭𝐞𝐫𝐜𝐲𝐜𝐥𝐢𝐜𝐚𝐥 𝐏𝐨𝐭𝐞𝐧𝐭𝐢𝐚𝐥 𝐨𝐟 𝐈𝐅𝐑𝐒 9 This insightful 2023 study evaluates the cyclicality of loan loss provisions under IFRS 9, focusing on its Expected Credit Loss (ECL) model during crises such as COVID-19. The research analyzes whether IFRS 9's forward-looking approach reduces financial instability by mitigating procyclicality, a critical flaw under IAS 39. The authors assess the model’s effectiveness in times of economic stress providing key insights for Financial Risk Managers and Regulators. 🔍 𝐖𝐡𝐚𝐭 𝐌𝐚𝐤𝐞𝐬 𝐓𝐡𝐢𝐬 𝐏𝐚𝐩𝐞𝐫 𝐄𝐬𝐬𝐞𝐧𝐭𝐢𝐚𝐥? This paper provides one of the first empirical tests of IFRS 9’s performance under a real-world global stress scenario, offering vital insights to enhance financial stability through improved credit risk management practices 💡 𝐊𝐞𝐲 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 The study examines 51 Eurozone banks over seven years, revealing the complex effects of IFRS 9, highlighting necessity of strong statistical methods to understand provisioning behaviors under varying conditions. A. 𝐏𝐫𝐨𝐜𝐲𝐜𝐥𝐢𝐜𝐚𝐥𝐢𝐭𝐲 𝐯𝐬. 𝐂𝐨𝐮𝐧𝐭𝐞𝐫𝐜𝐲𝐜𝐥𝐢𝐜𝐚𝐥𝐢𝐭𝐲: The authors observed that while IFRS 9 initially exhibited procyclical tendencies (consistent with IAS 39), there was limited evidence of countercyclical movement in loan loss provisions during 2020. While this finding offers some optimism, the authors caution that further data and analysis are required to confirm the sustained effectiveness of IFRS 9 during various stress scenarios. We'd love to hear your thoughts on this in the comments below 👇 B. 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐯𝐞 𝐀𝐩𝐩𝐫𝐨𝐚𝐜𝐡 & 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬 𝐢𝐧 𝐀𝐩𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧: According to the authors, IFRS 9's approach, considering macroeconomic factors, offers potential improvements over IAS 39. However, they note challenges related to managerial discretion and uneven application across banks, which could affect the model's consistency and comparability. The study emphasizes the vital need for continuous oversight of provisioning models to achieve the perfect balance between prudence and financial stability. A big thanks to the authors for delivering such a profound and impactful analysis, truly a deep dive into this essential topic! Source: https://shorturl.at/Z3XOw 𝗘𝗻𝗷𝗼𝘆𝗲𝗱 𝗥𝗲𝗮𝗱𝗶𝗻𝗴 𝘁𝗵𝗶𝘀? Join a global vibrant community of ~15000 finance and risk management professionals at Risk Inn 𝗦𝘁𝗮𝘆 𝗜𝗻𝗳𝗼𝗿𝗺𝗲𝗱 𝗮𝗻𝗱 𝗖𝗼𝗻𝗻𝗲𝗰𝘁𝗲𝗱 🤝 https://bit.ly/4dXIc2h (𝘞𝘦 𝘝𝘦𝘳𝘪𝘧𝘺) #finance #riskmanagement #creditrisk #ifrs9 #accountingstandards #banking #ifrs9limitation #globalbanking #financialstability #creditloss #countercyclical #frm #cfa #scr #rai #marketrisk #irrbb #financialregulations #eclmodel #bankingregulations #ias39 #ifrsstandards #financialriskmanagement #big4 #loanprovisions #capitaladequacy #gsibs #financialcrisis #eurozonebanks #businessfinance #riskinn

𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐑𝐢𝐬𝐤 𝐀𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭: 𝐔𝐧𝐥𝐞𝐚𝐬𝐡𝐢𝐧𝐠 𝐭𝐡𝐞 𝐏𝐨𝐰𝐞𝐫 𝐨𝐟 𝐌𝐨𝐧𝐭𝐞 𝐂𝐚𝐫𝐥𝐨 𝐒𝐢𝐦𝐮𝐥𝐚𝐭𝐢𝐨𝐧 This 2024 study published in International Scientific and Practical Conference, highlights the transformative use of Monte Carlo simulation for financial risk assessment and investment decision-making. 🔍 𝐖𝐡𝐲 𝐑𝐞𝐚𝐝 𝐭𝐡𝐢𝐬 𝐩𝐚𝐩𝐞𝐫? The paper explores the application of Monte Carlo methods in evaluating economic risks and improving project management under uncertain conditions. It details algorithms for incorporating randomness into investment cycle modeling. 💡 𝐊𝐞𝐲 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬  1. 𝐑𝐢𝐬𝐤 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬 𝐑𝐞𝐝𝐞𝐟𝐢𝐧𝐞𝐝: Combines sensitivity analysis with probability-based scenarios, generating robust probabilistic distributions of financial outcomes (e.g., NPV). 2. 𝐂𝐨𝐦𝐩𝐮𝐭𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐀𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞: Automates iterations to evaluate project outcomes using random sampling, leveraging tools like the Risk-Master software. 3. 𝐃𝐚𝐭𝐚-𝐃𝐫𝐢𝐯𝐞𝐧 𝐃𝐞𝐜𝐢𝐬𝐢𝐨𝐧𝐬: Introduces methods to estimate risk distribution and account for correlated variables, addressing potential biases. 📈 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐚𝐥 𝐈𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬: Monte Carlo simulation enhances investment decision-making by addressing variability and uncertainty in cash flow projections. Its combination with statistical tools and game theory enables more optimistic and precise risk evaluations compared to traditional methods. This research underscores the critical role of accurate input data and correlation analysis in ensuring reliable results. By refining economic risk modeling, the study provides valuable insights for professionals in finance and investment planning. Source : https://shorturl.at/2rLPk 𝗘𝗻𝗷𝗼𝘆𝗲𝗱 𝗥𝗲𝗮𝗱𝗶𝗻𝗴 𝘁𝗵𝗶𝘀? Join a vibrant community of 10000+ finance and risk management professionals at Risk Inn 𝗦𝘁𝗮𝘆 𝗜𝗻𝗳𝗼𝗿𝗺𝗲𝗱 𝗮𝗻𝗱 𝗖𝗼𝗻𝗻𝗲𝗰𝘁𝗲𝗱 🤝  https://bit.ly/4dXIc2h (𝘞𝘦 𝘝𝘦𝘳𝘪𝘧𝘺) #riskmanagement #montecarlosimulation #financialrisk #investmentstrategy #projectmanagement #decisionmaking #uncertaintyanalysis #dataanalytics #businessstrategy #financialmodeling #quantitativerisk #simulationtools #economicforecasting #businessanalytics #projectevaluation #riskassessment #dataanalysis #statisticalmodeling #investmentrisk #decisionanalytics #complexsystems #economicmodeling #financialplanning #probabilityanalysis #businessinsights

🏁 𝗥𝗶𝘀𝗸 𝗠𝗮𝗻𝗮𝗴𝗲𝗿 𝗖𝗵𝗲𝗰𝗸 𝗣𝗼𝗶𝗻𝘁 🏁 Test your skills with our quick 𝑷𝒐𝒍𝒍 𝒂𝒔 𝒚𝒐𝒖 𝑺𝒄𝒓𝒐𝒍𝒍! Challenge yourself & gain expert insights by joining our FREE and Exclusive WhatsApp & GroupMe Global communities for expert insights, career opportunities, FRM 1 & 2 prep, and more 🚀 Our Exclusive Global Careers Club (GCC) offers a professional space with daily polls, articles on FRM, SCR, and RAI, and unique career opportunities for Risk Professionals! 👉 Join 𝐆𝐥𝐨𝐛𝐚𝐥 𝐂𝐚𝐫𝐞𝐞𝐫𝐬 𝐂𝐥𝐮𝐛 on WhatsApp: https://shorturl.at/MeAdw 👉 Join 𝐅𝐑𝐌 1&2 Community on WhatsApp: https://shorturl.at/uajnu Want to receive expert guidance for landing your dream job? https://bit.ly/3CbaJDC

𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐑𝐢𝐬𝐤 𝐚𝐧𝐝 𝐑𝐞𝐭𝐮𝐫𝐧: 𝐂𝐀𝐏𝐌 𝐚𝐧𝐝 𝐅𝐚𝐦𝐚-𝐅𝐫𝐞𝐧𝐜𝐡 𝐓𝐡𝐫𝐞𝐞-𝐅𝐚𝐜𝐭𝐨𝐫 𝐌𝐨𝐝𝐞𝐥 This foundational paper by the Tuck School of Business demystifies two key models: The Capital Asset Pricing Model (CAPM) and The Fama-French Three-Factor Model for analyzing investment risks and returns. 🔍 𝐖𝐡𝐚𝐭’𝐬 𝐍𝐞𝐰? The paper explains the evolution from CAPM's single-factor model to the Fama-French framework, which incorporates size and value factors, offering a richer explanation of asset returns. 💡 𝐊𝐞𝐲 𝐈𝐧𝐬𝐢𝐠𝐡𝐭𝐬 𝐚𝐭 𝐚 𝐆𝐥𝐚𝐧𝐜𝐞: 𝐑𝐢𝐬𝐤-𝐑𝐞𝐭𝐮𝐫𝐧 𝐓𝐫𝐚𝐝𝐞𝐨𝐟𝐟: 1) CAPM links higher expected returns to systematic market risk (beta), providing a baseline for asset evaluation. The Fama-French model extends this by introducing size (SMB) and value (HML) factors to capture additional risks. 2) Diversification reduces unsystematic risk, emphasizing the importance of systematic factors in return predictions. Fund Manager Evaluation: 3) CAPM and Fama-French models can identify whether excess returns result from manager skill or mere exposure to risk factors. 📈 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐚𝐥 𝐈𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬: These models guide investors in constructing well-diversified portfolios, analyzing mutual funds, and making informed investment decisions based on risk-reward preferences. Source: https://shorturl.at/FMeq4 𝗘𝗻𝗷𝗼𝘆𝗲𝗱 𝗥𝗲𝗮𝗱𝗶𝗻𝗴 𝘁𝗵𝗶𝘀? Join a vibrant community of 10000+ finance and risk management professionals at Risk Inn 𝗦𝘁𝗮𝘆 𝗜𝗻𝗳𝗼𝗿𝗺𝗲𝗱 𝗮𝗻𝗱 𝗖𝗼𝗻𝗻𝗲𝗰𝘁𝗲𝗱 🤝  https://bit.ly/4dXIc2h (𝘞𝘦 𝘝𝘦𝘳𝘪𝘧𝘺) #finance #investing #riskmanagement #portfoliotheory #capm #famafrench #financialmodels #systematicrisk #unsystematicrisk #returns #investments #riskreturn #financialanalysis #mutualfunds #diversification #valueinvesting #growthinvesting #assetmanagement #beta #stockmarket #marketrisk #sizereffect #valuerisk #financialtheory #investmentstrategies

𝐂𝐫𝐚𝐜𝐤𝐢𝐧𝐠 𝐋𝐢𝐪𝐮𝐢𝐝𝐢𝐭𝐲 𝐑𝐢𝐬𝐤 𝐏𝐚𝐫𝐭 𝐁: 𝐇𝐨𝐰 𝐌𝐚𝐜𝐡𝐢𝐧𝐞 𝐋𝐞𝐚𝐫𝐧𝐢𝐧𝐠 𝐢𝐬 𝐄𝐧𝐡𝐚𝐧𝐜𝐢𝐧𝐠 𝐒𝐮𝐩𝐞𝐫𝐯𝐢𝐬𝐨𝐫𝐲 𝐑𝐢𝐬𝐤 𝐀𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭𝐬 Seeing the strong response to Part 1, which received 18,000+ impressions, here’s Part 2 on the subject, where we discuss a 2022 study offering deeper insights into the supervisory approach to liquidity risk. Using real-world data from the Portuguese banks between 2014 and 2021, the study highlights how advanced models like XGBoost are reshaping liquidity risk assessment and providing tools for stress testing and Early Warning Systems (EWS). 𝐖𝐡𝐲 𝐘𝐨𝐮 𝐒𝐡𝐨𝐮𝐥𝐝 𝐑𝐞𝐚𝐝 𝐭𝐡𝐢𝐬 𝐏𝐚𝐩𝐞𝐫 For those in banking and financial risk management, this paper demonstrates how supervisory bodies can leverage ML to achieve more precise, scalable, and replicable risk assessments. It’s a must-read for anyone seeking to align with modern regulatory expectations while building a resilient liquidity framework. 💡 𝐓𝐨𝐩 𝐑𝐞𝐬𝐞𝐚𝐫𝐜𝐡 𝐈𝐧𝐬𝐢𝐠𝐡𝐭𝐬 𝐭𝐨 𝐄𝐥𝐞𝐯𝐚𝐭𝐞 𝐑𝐢𝐬𝐤 𝐀𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭! 1. 𝐗𝐆𝐁𝐨𝐨𝐬𝐭 𝐋𝐞𝐚𝐝𝐬 𝐭𝐡𝐞 𝐖𝐚𝐲: The paper highlights that XGBoost outperformed both traditional statistical models, such as logistic regression, and other machine learning algorithms, like Random Forest, in terms of accuracy and interpretability. This makes it particularly suited for supervisory liquidity risk classification tasks. 2. 𝐌𝐮𝐥𝐭𝐢-𝐂𝐥𝐚𝐬𝐬 𝐂𝐥𝐚𝐬𝐬𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧: The authors propose and implement a more nuanced multi-class classification system under the European Central Bank (ECB)’s Risk Assessment System (RAS). This framework categorizes liquidity risk into four levels: low, medium-low, medium, and high, enhancing the granularity and interpretability of risk profiles.  3. 𝐒𝐜𝐞𝐧𝐚𝐫𝐢𝐨 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬 & 𝐄𝐚𝐫𝐥𝐲 𝐖𝐚𝐫𝐧𝐢𝐧𝐠 𝐒𝐲𝐬𝐭𝐞𝐦𝐬: By integrating scenario analysis tools with EWS, the study offers practical solutions for forecasting and mitigating liquidity crises before they escalate. Kudos to the authors for their visionary work! Want to dive deeper? 𝗥𝗲𝗮𝗱 𝘁𝗵𝗲 𝗮𝘁𝘁𝗮𝗰𝗵𝗲𝗱 𝐩𝐚𝐩𝐞𝐫! 𝐒𝐨𝐮𝐫𝐜𝐞: https://shorturl.at/Vfnln 𝗘𝗻𝗷𝗼𝘆𝗲𝗱 𝗥𝗲𝗮𝗱𝗶𝗻𝗴 𝘁𝗵𝗶𝘀? Join a vibrant community of 10000+ finance and risk management professionals at Risk Inn 𝗦𝘁𝗮𝘆 𝗜𝗻𝗳𝗼𝗿𝗺𝗲𝗱 𝗮𝗻𝗱 𝗖𝗼𝗻𝗻𝗲𝗰𝘁𝗲𝗱 🤝 https://bit.ly/4dXIc2h (𝘞𝘦 𝘝𝘦𝘳𝘪𝘧𝘺) #machinelearning #riskmanagement #liquidityrisk #bankingsupervision #financialregulation #stresstesting #earlywarningsystem #datascienceinfinance #riskassessment #xgboost #fintechinnovation #financialstability #marketrisk #creditrisk #frm #scr #cfa #rai #supervisorytechnology #bankinginnovation #creditrisk #dataanalytics #economicpolicy #europeancentralbank #financialmodeling #srep #algorithmicfinance #aiinbanking #regulatorycompliance #bigdata #predictiveanalytics