The Heart of Risk Management? Data

iStock_000002641638XSmallBy Sophie Fletcher (Chicago)

At the heart of risk management is data management. This is according to three speakers at the Securities Information and Financial Markets Association’s (SIFMA) Technology Expo. Edward Hida, partner at Deloitte & Touche, Keith Sexton, the global director of the financial markets at IBM, and Chris Church, the CEO of SWIFT Americas were all given the opportunity to explain how their companies were tackling risk management.

Deloitte Surveys Market Participants For Answers

Deloitte & Touche interviewed regulators, securities broker-dealers, banks, insurance companies, hedge funds, and exchanges to find out how they defined and viewed systemic risk. They also set out to discover what information was needed from these financial institutions to identify, measure and monitor systemic risk.

What they came up with was a variety of approaches involving regulators, clearing houses and financial institutions that would help manage and measure a firm’s exposure to risk. The range of solutions involved regulators developing stress tests and financial institutions performing, analyzing and reporting the results as well as regulators developing a consistent standard for enterprise-wide risk reporting across the market.

Hida also described an approach that involved building a trade repository where firms would provide data and where regulators and clearing houses could measure and monitor that information in terms of risk exposure.

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Voice of Experience: Susan Siegmund, Partner, PricewaterhouseCoopers LLP

Susan SiegmundBy Melissa J. Anderson (New York City)

In honor of Pride Month, The Glass Hammer is featuring an interview with PwC’s Susan Siegmund, the first female partner to sit on the firm’s GLBT Advisory Board. Siegmund’s personal story illustrates the value of GLBT support in the workplace.

Susan Siegmund is a Fort Worth, Texas, based audit partner at PricewaterhouseCoopers and the first female partner to sit on the firm’s GLBT Advisory Board. PwC’s GLBT Advisory Board – the first of its kind among the Big Four firms – is comprised of openly gay partners and professionals with varied tenures, skills and life experiences. The group provides visible role models for PwC’s GLBT professionals and advises firm leadership on the planning and implementation of GLBT initiatives.

“What we are trying to achieve at PwC is making sure everybody is comfortable – that we are bringing our whole selves to work,” explained Siegmund. “We’re trying to build a culture of inclusion, bringing together all of our experiences and stories.”

Siegmund’s own story was a major factor in her decision to get involved in PwC’s GLBT community in the first place, and later to take a more active leadership role.

“I’m excited but also anxious about stepping out and being a role model. I’ve always been more of a private person – I’m a little out of my comfort zone,” she said.

She joined the firm in 1988, and for the majority of her career didn’t think it was important to make a big deal about being out at work. But a relationship she began in September 2001 changed her perspective. “I started a relationship with Teresa,” she said, referring to her partner Teresa Martin. Eventually, Siegmund came out to her family and the two moved in together.

“Over the next few years, I still didn’t come out at work. I thought people already knew. I really didn’t think I was hiding it. Teresa would come to various work functions or parties, but I never formally introduced her as my life partner or my domestic partner,” she explained.

It wasn’t until a crisis forced Siegmund to come out to her colleagues that she realized the value of being open at work.

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Women’s Financial Confidence Rising, Finds Citi’s Women & Co. Research

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iStock_000002762853XSmallBy Melissa J. Anderson (New York City)

“Women’s one-word association with wealth is security,” said Linda Descano, President and COO at Women & Co., a division of Citi.

Recently, Women & Co. released the results of its national survey on women and personal finance, which measured women’s attitudes toward money and financial decision-making following the recent recession.

Descano said that even before the recession, women saw wealth as a means to security, and now she said, “The women surveyed think the rest of society is finally thinking like them. Their financial values have really held steadfast.”

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In Case You Missed It: Business News Round-Up

Beth 005Contributed by Beth Collinge of CTG – a division of ILX Group plc.

Financial markets fell this week. In the US, the Fed froze rates on Wednesday and financial reform legislation was passed Thursday. The UK will introduce a levy on banks, which is expected to raise £2bn a year. This weekend China ended the peg of the yuan at about 6.83 to the dollar.

Economic Backdrop

  • The financial markets this week were dominated by growing doubts about the strength of the global recovery, with the FTSE and the DJIA both losing more than 3 per cent.
  • Sterling rose to a six-week high against the dollar on Wednesday after minutes of the Bank of England‘s monetary policy committee meeting this month revealed one member had voted to raise interest rates. The news allowed sterling to build on the strong gains sparked by Tuesday’s emergency Budget. The pound finished the week at a high of $1.498 against the dollar, its strongest level since May 12. Sterling also rose against the euro.
  • On Friday the spot gold price rose to $1,244.55 a troy ounce, just short of the all-time nominal high of $1,264.90 set on Monday.
  • The yield on the 10-year US Treasury tumbled 13 basis points over the week to 3.14 per cent, with the 10-year UK Gilt yield sliding to 3.40 per cent.

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In Case You Missed It: Business News Round-Up

Beth 005Contributed by Beth Collinge of CTG – a division of ILX Group plc.

In the UK, the Financial Services Authority (FSA) will be abolished and replaced by a number of committees and agencies, The Bank of England will take on an expanded role as arbiter of both monetary and regulatory policy and a new Banking Commission has been established to review the future shape of the banking industry. The EU decided to publish results of “stress-tests” on 25 banks in July.

Economic Backdrop

  • Global equities rose for the second week running as tensions over the eurozone debt crisis showed signs of easing. The FTSE 100 dipped on Friday, breaking a run of seven consecutive daily gains, but over the week the index rose 1.7 per cent, cutting its loss for the year down to 3 per cent.
  • Meanwhile benign US consumer prices boosted US government bonds: the yield on the 10-year Treasury notes was 3.21 per cent, down 0.01% on the week.
  • In the currency market, the euro rallied again rising to a 3-week high of $1.2380 against the dollar, as concerns over Spain’s ability to service its debts waned, after the country raised €3.48bn in the bond market on Thursday.
  • In commodities, gold hit a nominal record high above $1,260 a troy ounce on Friday, boosted by investors buying bullion-backed exchange-traded funds. GFMS, the precious metals consultancy, says investors last year bought more gold than buyers of jewelery for the first time in three decades.

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Celebrating Two of LA’s History-Making Female Lawyers

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iStock_000002362162XSmallBy Tina Vasquez (Los Angeles)

Twelve of the nation’s largest law firms are centrally located in the city of Los Angeles and according to numbers from the Bureau of Labor Statistics, there are 556,790 lawyers in California – not including those who are self-employed. As a lawyer, making a name for yourself in this city may not be the easiest of tasks, but if you’re incredibly dedicated to your work, your clients, and your profession – such as the women heralded by the Los Angeles Times as the city’s Women Leaders in the Law – chances are, you’ll make a name for yourself.

The supplement to the Times featured a number of Los Angeles’ top female lawyers, including a revered firm’s first female attorney and a lawyer who was behind a landmark civil rights case. Let’s get to know Amy Fisch Solomon and Deborah Chang, two lawyers who took a different path to making history.

Amy Fisch Solomon, Girardi Keese

If it weren’t for a severe injury, Amy Solomon’s life might have turned out much differently. In third grade she made a deal with her mother: her mom would continue to pay for ballet lessons if Solomon promised to work hard in school and always have something to fall back on. The deal continued well after high school when Solomon began dancing professionally, but after sustaining an injury, she was forced to reevaluate her life. “I enrolled in college and was Pre-Med my first year. I decided that it was too much science and not enough ‘people stuff,’ so I focused on preparing to go to law school,” Solomon said.

Only a former dancer, still in love with the art, could equate her performances on the stage with her performance in front of a jury. “From the beginning I always knew I wanted to be a trial lawyer because of the similarity of performing as a dancer,” Solomon said. “It was the same idea: connecting with an audience to tell them a story that will move them. When I discovered that I could tell stories for people who had no voice – ‘the little guy’ – I was immediately drawn to that area.”

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Mary Schapiro, SEC Chairman, Talks at the FWA

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Photo courtesy sec.gov

Photo courtesy sec.gov

By Melissa J. Anderson (New York City)

“I’ve surrounded myself with great and talented people and that’s the secret of my success,” said Mary Schapiro, Chairman of the Securities Exchange Commission. Schapiro was interviewed by CNBC‘s Maria Bartiromo Monday at New York Law School, for an event hosted by the Financial Women’s Association of New York.

Schapiro attributed her level of success to, “Not being afraid to hire people much smarter than I am.” She also mentioned the importance of “diversity of perspective.”

She continued, “The people make it worthwhile. …We are well-positioned to make a difference for American investors.”

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In Case You Missed It: Business News Round-Up

Beth 005Contributed by Beth Collinge of CTG – a division of ILX Group plc.

Global equities rebounded this week. Santander purchased Bank of America’s stake in its Mexican operations, seizing back full control of the business. BP may suspend its dividend to fund the cleanup of the Gulf oil spill. EU finance ministers backed Estonia’s bid to become the 17th member of the eurozone.

Economic Backdrop

  • After a poor start to the week, global equities rebounded on news that China’s exports in May rose 48.5 per cent year-on-year, cooling fears that the eurozone debt crisis and planned austerity measures would damp global growth.
  • The dollar slipped while the euro rebounded from a four-year low on Tuesday in volatile currency trading. A decision from the German constitutional court to reject an injunction to prevent the country from contributing to the eurozone rescue package also boosted the euro. The euro recovered to stand up 1.2 per cent to $1.2115 against the dollar on the week, and 0.4 per cent stronger against the pound at £0.8305.
  • In government bonds, US long-term debt sales attracted solid demand and the yield on 10-year notes was up 3bp on the week at 3.23 per cent.
  • In commodities, U.S. light crude oil for July delivery fell $1.70 to $73.78 a barrel: gold hit an all-time high of $1,252 on Tuesday and closed at $1,217 spot.
  • At central bank meetings this week the Bank of England and European Central Bank left rates unchanged at record low levels.

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The Athena Collaborative: Putting Women in the Investment Banking Pipeline

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internsBy Melissa J. Anderson (New York City)

“The pipeline leaks start very, very early,” said Christina DelliSanti Miller, founder of the Athena Collaborative, an organization whose mission is to expand the population of women entering and thriving in quantitative careers. She explained that research shows “girls check out of math in 6th grade.” On the other hand, “Math and STEM careers are the most lucrative. Girls are socialized or self-selecting out before they realize what business is.”

“More than half the people going to college are women. In the securities industry, only 14% of people at the highest level are women,” she said. Shouldn’t these numbers be closer to parity?

Patching the Leaky Pipeline

Providing mentoring and internships to young women is one way the Athena Collaborative works to plug those pipeline leaks.

Miller, former Head of Diversity at Barclays and a social psychologist, has 20 years of experience working in diversity functions in big business – and the last 10 years in the financial services industry. She founded the organization after seeing not only a decrease in the number of women in the industry, but also the difficulties companies were facing in building diverse teams. She said, “We were competing for a small pool of women,” she said. “The higher up you go, there are less women.”

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The State of Microfinance in Latin America

Courtesey of Pro Mujer

Courtesey of Pro Mujer

By Melissa J. Anderson (New York City)

Last Thursday, the Financial Women’s Association of New York held an informational panel discussion on the state of microfinance in Latin America. The panel, moderated by Sheila Hooda, Senior Managing Director, TIAA-CREF, featured a broad spectrum of experts: Sandra Darville, Unit Chief, Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB); Gary P. Kochubka, Senior Director, Standard & Poor’s (S&P); Rosario Perez, Chief Executive Officer, Pro Mujer; and Peter V. A. Shaw, Managing Director, FitchRatings.

One of the main takeaways of the event was that it’s difficult to discuss “microfinance in Latin America” because the market is so broad, with the industry taking on several stages of maturity across the region.

As Darville explained, in some areas of the region, the microfinance market is extremely developed (with over 30% penetration), while in other places, penetration is “less than 1%.”

Hooda summarized, “Microfinance originated in Latin America. A lot of institutions are very mature. Government regulation is mostly helpful…” Over the years, she explained, the industry has survived a lot of turmoil – whether hurricanes or political unrest – but, she said of the state of the industry in the past two years, “this is the first time the crisis is not [based in] Latin America – it originated in the US.”

Shaw said, “Broadly and structurally… microfinance as an industry has penetrated deeper in Latin America than in some of the other markets in which it is active today.” He explained that in the last ten years, the industry has undergone a cycle of development in which entities started largely as unregulated institutions, funded mostly by venture capital or philanthropic donations.

As the industry has grown, it has become more heavily regulated. “Non-banks transform into banks,” he explained. “Deposits are becoming more important to balance sheets.”

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