Professor Michael Spence on the Recent Global Market Volatility

The following is an excerpt from a recent op-ed published in The Huffington Post by NYU Stern Professor, Michael Spence titled “China’s Volatile Stock Market Does Not Reflect Real Economic Conditions.”

Markets plunged again this week, a mini quake with the apparent epicenter in China. The question on the minds of economic policy makers and investors is what is going on and what will the future hold?

It would be tempting to attribute all of this to fears of faltering growth and imbalances in the Chinese economy. But that can’t be right. The Chinese economy, at roughly three quarters the size of America’s and Europe’s, is systemically important. But even an extreme slowdown in China would not derail the whole global economy.

The overriding context appears to be extreme uncertainty about the causes and consequences of these moves, leading to very high volatility.

It seems natural to ask whether the perceived trajectory of the global economy has shifted downward as much as the movements in the equity markets might seem to suggest. The answer seems clearly to be no.

Read the full article here.

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MSRM Class of 2015 Alumni Profile: Mohammed Al-Obaid

MohammedMohammed was fairly new in his position as head of risk management for Saudi Arabia’s Jadwa Investment when he entered NYU Stern’s Master’s in Risk Management program. During the course of the program, his skill set and perspective on his chosen field grew along with him in the job, a perfect match. “Thanks to Stern, I have already gained by being ahead of the curve in risk management, as I now have the ability to manage risk from a broad systemic and strategic perspective with a focus on enterprise-wide risk management,” he says. Jadwa, founded in 2006 and based in Riyadh, is an investment management and advisory firm.

Since earning an undergraduate finance degree in 2003 from Saudi Arabia’s King Fahd University of Petroleum and Minerals and beginning his career in that field within the so-called semi-government sector, Mohammed’s skills and horizons have steadily expanded. He moved from the industrial lending department at Saudi Industrial Development Fund to the private sector, staying more than five years at Al Rajhi Banking and Investments Group, the leading Islamic bank. There he explored corporate and investment banking, distinguishing himself by developing an innovative risk management model, policies, and procedures and earning a promotion to vice president of risk management. In the Saudi market, where most risk management executives are expatriates, Mohammed is a local pioneer in the field.

Despite his success at a young age, he was perspicacious enough to realize that to stay ahead of the curve and be a leader, he needed to pursue more education in risk management, especially in regard to global business trends and best practices. Stern’s MSRM offered it all, he says. “Stern provided the ideal opportunity to cultivate my understanding of risk within a classroom setting, where I could also explore innovative ideas with an accomplished and diverse student body. The robust curriculum and global perspective were exactly what I was seeking.”

Adds Mohammed: “The MSRM’s rich curriculum, presented through its five-module structure, is perhaps only trumped by its dynamic student body and world-class faculty. This program helped me to understand the strategic dimensions of risk management and prepared me for the next move in my career, toward playing a strategic role in business development at the corporate executive level.  Stern’s MSRM program helped make this a reality rather than an opportunity.”

Read more MSRM Alumni Profiles on our website here!

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MSRM Class of 2016 Opens the Amsterdam Stock Exchange!

On Tuesday, August 11, 2015, the NYU Stern MSRM Program rang the gong to open the Amsterdam stock exchange. The MSRM Program travels to Amsterdam to host Module 2 August 10-15, 2015 at the Amsterdam Institute of Finance. The program covers derivatives securities, risk analytics, Market Risk, Var and RAROC during Module 2.

View more information on the Gong Ceremony here!

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National Stock Exchange of India and NYU Stern starts Indian Financial Markets Conference 2015

Stern-NSEThe National Stock Exchange (NSE), India’s leading stock exchange, and New York University Stern School of Business (NYU Stern), one of the world’s premier research and teaching institutions, began their third annual ‘Indian Financial Markets Conference 2015’ today in Mumbai, India. This two-day conference is an outcome of the joint initiative by the NSE and NYU Stern to: (a) promote the study of Indian financial markets, (b) provide a platform for industry and academia to complement each other, and (c) deliver effective research support for policy making. The primary objective of this conference is to present and discuss the research papers which were selected on the basis of a global call for papers.

The NSE-NYU Stern Indian Financial Markets Conference 2015 is convening a number of financial market leaders from industry, the public sector and academia.

“While we, at NYU Stern, understand the markets and institutions in developed economies to an extent, we need to do much more work to understand more fully the markets and institutions in emerging markets, such as India.  The NSE-NYU Stern partnership provides a network of academics interested in studying the Indian financial markets,” said Professor Viral Acharya of NYU Stern.

Read the full press release here.

More coverage was also featured on India Education Diary.

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Alumni Engagement: Andrew Koh on Ops Risk Practices and Strategies

On July 29, MSRM Class of 2010 alum, Andrew Koh spoke at the OpRisk Asia conference on “Permeating Risk Culture from Boardrooms to Front Offices.” The following is an excerpt from

N12220351 KohOn July 29, speakers at the OpRisk Asia conference in Singapore acknowledged that culture and conduct risk lay at the root of many operational risk failures, but warned that trying to impose company-wide cultural change could be an impossible task.

Instead, companies should try to drive change by picking a few ‘risk champions’ in each department and linking their compensation to culture and conduct risk metrics, argued Andrew Koh, deputy chief risk control manager at China Construction Bank in Singapore.

“You can’t reward everyone for cultural change, but you can appoint two or three risk champions in every department with key performance indicators for the implementation [of cultural change] and link that to reward or compensation,” Koh said. “Some of them [in China Construction Bank] have gone on to work in op risk as well later because they came to understand it very well … you will need to get HR involved to check that you are in line with hiring and compensation policies. And make it something easy to start with like the department’s risk and control self-assessment [RCSA] passing audit – not something like ‘zero risk incidents in the department’. You can put more objectives in for people who want to do more, to set the bar higher.” Building up the pool of risk-trained staff in each department would have its own advantages, he added: “A lot of banks don’t have a big crop of people to manage risk – and, when they need to react to an incident, you can tell.”

Read more here.

Andrew also spoke at the 6th Annual ASEAN Technology & Innovation – the Future of Banking & Financial Services on July 22, 2015. He covered Mitigating Risks in Technology to Drive Innovative Payment Solutions.

On October 14, 2015 Andrew will be traveling to Hong Kong to speak on the topic of Defending Against Cyber Security Threats To The Payment & Banking System. This topic was also covered in the Third Annual Risk Management Symposium on May 30, 2015.

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