2nd Line of Defence

In 2018, several major financial institutions suffered market losses totaling c. $500mm.  The losses were the direct result of a counterparty walking away from its settlement obligations in the purchase of government bonds.  The losses were attributable to the fact that the market convention of ‘delivery versus payment’ was considered ‘risk-less’ under their existing credit risk management frameworks.

Risk management frameworks, absent stress, remain static whilst the nature of risk continually evolves.  Risk frameworks must keep apace.

Drawing on our practical experience in the design of a proven DVP framework, Arboreal Risk Advisors will work with you to develop a tailored solution that is fit for purpose and commercially viable.