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Risk Management

02:14 PM
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Post-SocGen, Firms Increase Focus on Risk

Better communications and same-day affirmation for derivatives trading are among major concerns for financial firms who want to reduce risk.

After SocGen's $7 billion loss from unauthorized trading, most financial services firms took immediate steps to reduce risk by improving communication between their front, middle and back offices, according to a new survey.

The survey was carried out by Omgeo, a provider of post-trade, pre-settlement services for the global securities industry, which polled its Americas Advisory Board, comprised of large and small investment managers, broker/dealers and custodians who use Omgeo's services.

Over 50% of respondents agreed that despite an increased a SocGen-like incident is likely to re-occur at another firm within the next 24 months.

The survey also found that in addition to more thorough communications, another major risk mitigation concern is the achievement of same-day affirmation for derivatives trading, since this has been shown to dramatically reduce the risk of failed trades.

Over 66% of respondents stated that regulation may be the only way to achieve broad adoption of SDA across multiple asset classes. Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio

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