It has become almost conventional wisdom that investors should avoid funds with high expense ratios. Like many nuggets of conventional wisdom, there is some truth, but many exceptions: some of the best funds come at the price of higher expense ratios. Financial planners need this type of...

The financial crisis of 2007-2008 was a liquidity crisis. Thus we must both study the source of the crisis and evaluate the regulatory measures to address it. How was this liquidity crisis and its associated risk related to other forms of risk? What was the nature of the vicious cycle that...

This paper aims to outline the common pitfalls that could impede the effective transformation of wholesale and corporate banking portals; to provide insights that will help organizations identify whether or not their own programs may be heading for the same challenges; and to suggest tactics and...

The initial hype about service-oriented architecture (SOA) is over, and it seems that it is not the next revolutionary step after centralized architectures. On the other hand, the paradigm may still be of use for financial services institutions (FSIs). <p> Lack of consequence in some recent SOA...</p>

The Basel Committee wrote in its update of the “Principles for the Sound Management of Operational Risk” in June 2011 that the frst line of defense is business line management. This underlines the continuous development from (ex-post) operational risk controlling to (ex-ante) operational...

Events such as the recent global financial crisis, the failure of Lehman Brothers, and the bailout of American International Group, have called increased attention to the opaque workings of the over-the-counter (OTC) derivatives markets which have remained unregulated until now. Nevertheless,...

Official inquiries into the failures of several large banks during the global financial crisis showed that strategic risk is one of the greatest risks facing any firm. But do other banks, especially those designated systemically important banks (SIBs), manage their strategic risks any better...

Measuring, controlling and managing operational risk have played an important role for bank industry endeavors since the publication of Basel II (2006) as the regulatory framework for the effective management and supervision of financial risks. More recently, due to the current financial crisis,...

The concept of industrialization in banking isn’t new, but in this article we argue that the circumstances that demand it are more pressing than ever. Although bank profits are returning to pre-crisis levels, return on equity (ROE) lags behind investor expectations. Furthermore, attempts in...

What is service profitability? With the financial industry facing economic turmoil, a squeeze on margins and a wave of new regulatory policies, there are many companies facing an urgent need for change to improve their profitability. There are also firms benefiting from the new era with a...