Description: Credit ratings have played an essential role in the financial system and have been used extensively by market participants. Despite their wide use in the financial services industry, they are actually insufficient for pricing and risk management of fixed income securities.

Description: The editors provide highlights of the articles included in the August 2015 issue of Risk Management.

Description: This report reviews the academic literature on risk aggregation and diversification as well as the regulatory approaches. We will point out the advantages and disadvantages of the different approaches with a focus on model risk issues.

Description: Is Risk/Return a sound tool for decision-making? No. It is not consistent, not objective, distorts decision and degrades governance. Why? What shall we do then?

Description: In this article, the author examines the black holes that arise every day in the form of pressures such as: competitive, top line growth, staff expertise, and regulatory to name a few.

Description: List of recent publications that may be of interest to readers of Risk Management newsletter.

Description: Author asserts that actuaries are arguably better at analyzing and interpreting risk than any other professional. The exhaustive exams teach us how to manage risk, not eliminate it. If the profession is to continue to flourish, it will be vital to take this idea and apply it to one’s career too.

Description: A sound enterprise risk management (ERM) framework functions as an ecosystem by balancing the interdependencies of its elements while constantly adapting to an ever‐changing, external environment. Each stakeholder has a unique role to play in forming a thriving ERM ecosystem by integrating risk‐conscientiousness in decision‐making. A resilient ERM framework has a single well‐ understood risk language and culture to promote healthy risk‐taking behaviors. The central focus of such a framework is concentrated around all stakeholders and everyone is held accountable. Every day, external forces can potentially disrupt how we operatively conduct business. Unforeseen changes in regulation, market trends, terrorist’s attacks and extreme natural disasters are often categorized as extremely adverse. How then will your ERM ecosystem survive the one‐in‐200 event and continue to flourish through dynamically changing environments?

Description: A labor union negotiator comments on the papers being presented at this symposium. From The Future of Pension Plan Funding and Disclosure Monograph, M-RS05-1.

Description: Demonstrating that incentive maximization could lead to failure using game theory. This is illustrated by the optimum strategy for the Prisoner Dilemma single period, multi period and infinite period that could be mutually destructive or beneficial.