From: riskwaters@lb.bcentral.com
To: vkamins@enron.com
Date: 2002-01-18 17:40:57+00:00
Subject: RiskNews Update - 18/01/2002

Dear Subscriber,

Welcome to RiskNews Update - 18/1/2002

The future viability of the Global Association of Risk Professionals (Garp) this week was again thrown into doubt, as a significant number of ex-Garp regional directors splintered off to form their own risk management association - the Professional Risk Managers' International Association (PRMIA). The new body, which will include local chapters in Europe, Asia, the Middle East, North America and South America, will be strictly not-for-profit and plans to run a new risk management certification programme in likely competition with Garp's Financial Risk Manager exam. The creation of PRMIA - pronounced 'premia' - comes as many senior Garp officials failed to reach satisfactory terms with Garp founders Marc Lore and Lev Borodovsky to convert that association back from a for-profit to a not-for-profit organisation. PRMIA plans to offer clear bylaws, publish a members' code of conduct, plus provide members with fully audited financials, all to be made available on its website, www!
.prmia.org. Regional chapters will include: London, New York, Chicago, Toronto, Boston, Montreal, Zurich, Philadelphia, Minneapolis, Charlotte, Australia, Japan, Korea, Singapore, India, Russia, Poland, Italy, Israel, Denmark, Sweden, Chile, Argentina and Spain. Others are in the pipeline.

Meanwhile, increased familiarity with credit derivatives is leading to a greater appetite for synthetic securitisation, according to Standard & Poor's (S&P) and Moody's. The agencies expect a sizeable increase in the synthetic securities market this year, following high growth levels in 2001. Greater investor sophistication, and decreasing yields in traditional investments are also driving the market. The two biggest growing asset classes in the synthetic market last year were collateralised debt obligations (CDO) and commercial mortgage-backed securities (CMBS). European CDO transactions saw a 50% jump over 2000 figures, while CMBS more than doubled, said Moody's. A large proportion of these deals were being used to capture enhanced yields through speculative arbitrage.

On the same theme, Dresdner Kleinwort Wasserstein has undertaken a major reorganisation of its credit derivatives operations, and named Rick Weinstein its new head of credit derivatives. Weinstein will report directly to Matteo Mazzocchi, global head of credit derivatives and securitisation. He will lead a group that now consists of four units: trading, collateralised debt obligations, collateralised synthetic obligations and structured credit products. The German bank has also hired Darren Smith as co-head of CDOs, where he will work alongside Jeremy Vice. Smith joins from the global structured products group at UBS Warburg.

Christopher Jeffery
Editor, RiskNews
http://www.risknews.net
mailto:cjeffery@riskwaters.com

PS: This is the last week for you to register for OpRisk 2002 Europe, London 29 & 30 January. There is an exclusive discount for RiskNews readers - see the bottom of this email for full details.

>> The January issue of Risk includes the results of the Risk Awards 2002, Risk's annual awards recognising innovation and excellence in the risk management industry. Register now for your FREE copy of this special issue at http://www.risk.net/awards2002. The awards will be presented at the Risk Awards 2002 Presentation Dinner, which will be held on 28 February at the Regent Hotel Wall Street, New York. Proceeds will go to the Risk Waters Group World Trade Center Appeal (see below for further details of the Appeal).

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Headlines/Technology and Exchanges/People/Events

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Headlines - 18/1/2002
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18 January 2002 - Increased familiarity with credit derivatives is leading to a greater appetite for synthetic securitisation, according to the two main rating agencies, Standard & Poor's (S&P) and Moody's.

16 January 2002 - More than 20 disgruntled former regional directors of the Global Association of Risk Professionals (Garp) have set up a rival risk management association called the Professional Risk Managers' International Association (PRMIA).

16 January 2002 - The future of the Global Association of Risk Professionals (Garp), the body that runs the Financial Risk Manager certification programme, was again in serious doubt Monday as its latest chief executive and another host of its regional directors quit in protest over stalled negotiations aimed at resolving the organisation's ownership structure.

15 January 2002 - The Asian securitisation market has registered its most successful year since the Asian financial crisis, with cross-border issuance totalling $2.74 billion in 2001, according to international rating agency Moody's. This growth is set to continue, with estimates of $3 billion in cross-border deals this year.

15 January 2002 - BNP Paribas has withdrawn from the weather derivatives market in a move likely to prompt closer scrutiny of weather-trading unit performance at other banks.

To read more now, click http://www.risknews.net

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Technology and Exchanges - 18/1/2002
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18 January 2002 - Union Pacific Railroad, a subsidiary of major American transportation company Union Pacific Corporation, has selected Kiodex Risk Workbench to manage its earnings exposure to energy price risk.

17 January 2002 - UK-based Reech Capital has joined the growing number of firms targeting the hedge fund industry with application service provider (ASP) financial services instruments, by unveiling a new Web-delivered risk management product.

16 January 2002 - Foreign exchange and money-market trading software provider Cognotec has teamed with Digital Island, the San Francisco-based communication infrastructure specialist, to improve online performance. The agreement involves Dublin-based Cognotec incorporating Digital Island's modular 2Way Web Services as part of its global internet transaction platform.

16 January 2002 - KBC has selected intelliMATCH from SunGard eProcess Intelligence, an operating unit of US financial services IT provider SunGard, for matching and reconciliating trades.

15 January 2002 - Bita Plus Consultants (BPC), the London-based provider of risk management and portfolio optimisation software, has developed a risk analysis and reporting service, Bita Complete, targeted at the fund management industry.

15 January 2002 - The Sydney Futures Exchange (SFE) entered a US$28 million, eight-year agreement on Friday to outsource its core clearing technology and operational support functions to Swedish technology vendor OM. The agreement includes US$5 million in capital costs and US$23 million in annual facilities management and software.

14 January 2002 - Derivatives trading volumes in Hong Kong soared to new highs last year, with total futures and options contract volumes rising by 13.9% in 2001 from the previous year, according to the Hong Kong Exchanges and Clearing (HKEx).

To read more now, click http://www.risknews.net

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People - 18/1/2002
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18 January 2002 - Atlanta-based commodities exchange, the IntercontinentalExchange (ICE), has made Richard Spencer its chief financial officer, a newly created role. ICE has also created an office of the chairman to manage the exchange's rapid growth. The office of the chairman will consist of Jeff Sprecher, ICE chief executive, chief operating officer Chuck Vice as well as Spencer.

17 January 2002 - Goldman Sachs has added two new portfolio managers and transferred another pair to its hedge fund strategies group - a unit the investment bank claimed has seen significant asset growth in recent months.

16 January 2002 - Honolulu-based risk management software firm, Kamakura, has made Jaqueline Outram managing director for client relationships and operations in Australia and the Asia Pacific region. She will also sit on the company's managing committee.

15 January 2002 - Lawrence Meyer, a US Federal Reserve Board governor, yesterday said he would resign from the board when his term ends on January 31. His departure will leave a second vacancy on the seven-member Fed board, after the retirement of former governor Edward Kelley last month.

14 January 2002 - Dresdner Kleinwort Wasserstein (DrKW) has undertaken a major reorganisation of its credit derivatives operations, and named Rick Weinstein its new head of credit derivatives.

14 January 2002 - UBS Warburg, the investment banking arm of Switzerland's UBS, has hired Michael Ice to head its interest rate derivatives marketing and structuring unit in the United States.

14 January 2002 - Eurex, the world's largest derivatives exchange as measured by transaction volumes, named Dresdner Bank board director Leonhard Fischer as chairman of its new exchange council - the highest supervisory body of the Swiss-German exchange.

To read more now, click http://www.risknews.net

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Events - 18/1/2002
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Take a look at the Risk Waters Group 2002 event calendar - it's now available online! Register for advanced 'Remind Me' alerts to be notified of specific event details, discount packages and other information at http://www.risk-conferences.com/events - If any of your colleagues or business associates would be interested in any of these events, please forward them this message.

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