More market risk studies are planned; RMA encourages wider participation from institutions.
Philadelphia, Pa. (November 18, 2004)—The Risk Management Association (RMA) has recently published the results of a study that provides a benchmark for best practices in counterparty credit risk measures and controls. The Counterparty Credit Risk Study also illustrates how institutions use IT to measure and monitor counterparty credit risk. The full results are available only to the 31 institutions that participated in the study, but an executive summary of the study is available to all on RMA’s Web site at www.rmahq.org.
“This study is the third in a series of market risk studies being conducted by RMA,” said Mark Zmiewski, RMA’s director of strategic research and analysis. “The long-term objective of the studies is to identify best practices and provide an ongoing benchmark in the area of counterparty credit risk and other market risk activities. We encourage more institutions to participate in these studies and benefit from the results.”
Coming Soon: A Hedge Fund Study
A similar study to determine the current state of practice and planned developments relating to hedge funds will begin in 2005. RMA is undertaking a benchmarking survey to learn more about the lines of business that financial institutions have with hedge funds, including trading lines, hedge-fund financing, financing a fund of funds, prime brokerage activities, and the range of custodial services organizations provide to hedge funds. This survey will also help participants learn more about other areas affecting institution’s relationships with hedge funds, such as operational risks, staffing issues, IT systems and architecture, and limits setting.
This landmark benchmarking survey will establish standards of practice for financial institutions and their dealings with hedge funds.
Institutions that would like to participate in the study should contact RMA project manager Fran Garritt at 215-446-4122 or fgarritt@rmahq.org.
About RMA
Founded in 1914, RMA is a nonprofit, member-driven professional association whose sole purpose is to advance the use of sound risk principles in the financial services industry. RMA promotes an enterprise-wide approach to risk management that focuses on credit risk, market risk, and operational risk.
Headquartered in Philadelphia, Pennsylvania, RMA has 3,000 institutional members that include banks of all sizes as well as nonbank financial institutions. They are represented in the Association by 16,400 risk management professionals in North America and numerous cities overseas, including Hong Kong, Singapore, Melbourne, Sydney, and London. Members meet regularly through RMA's strong chapter network.
Visit RMA on the Web at http://www.rmahq.org/.