GARP Risk Podcast

Stress Testing: Current Issues, Regulatory Analysis, and a Sneak Peek at the Future

Hear from Cristian deRitis, deputy chief economist at Moody's Analytics, on the stress testing impact of heightened geopolitical risk, constantly shifting tariffs, climate risk developments, and AI/ML evolution. This podcast examines stress testing challenges and trends, with an eye on how regulation and recent events are shaping these important exercises. Regulatory stress tests play a key role in ensuring that large banks hold enough capital withstand extreme recessions, while internal stress tests at banks are used for everything from capital and liquidity planning to risk monitoring, risk identification and operational resilience. Today, though, there are questions about whether regulatory stress tests – particularly the Federal Reserve's CCAR exercise – are transparent enough. Internal tests, moreover, are being heavily influenced by heightened geopolitical risk and U.S. policy changes, such as fluctuating tariffs. To more effectively manage all the different scenarios they must consider, financial institutions are also making greater use of next-generation technology, like artificial intelligence and machine learning, in their stress-testing methodologies. What's more, they must consider changing regulatory winds on climate risk. Relevant Links: GARP Benchmarking Initiative [https://www.garp.org/garp-benchmarking-initiative] Modeling Risk [https://www.garp.org/risk-intelligence/modeling-risk/all] (Risk Intelligence column by Cristian deRitis) Speaker's Bio Cristian deRitis is Managing Director and Deputy Chief Economist at Moody's Analytics. As the head of econometric model research and development, he specializes in the analysis of current and future economic conditions, scenario design, consumer credit markets and housing. In addition to his published research, Cristian is a co-host on the popular Inside Economics Podcast [https://podcasts.apple.com/us/podcast/moodys-talks-inside-economics/id1559966912]. He can be reached at cristian.deritis@moodys.com [cristian.deritis@moodys.com].

Tariffs, Trade Wars, and the Credit Risk Reckoning

Hear from Michael Crumpler, CEO, Credit Benchmark and Jon Hilsenrath, former Wall St. Journal senior writer and founder of Serpa Pinto Advisory, as we examine early warning signs, strategic responses, and innovative risk management approaches needed in today's volatile trade environment. This podcast explores the intersection of trade policy and credit risk, offering insights for senior risk managers navigating an increasingly complex global landscape: * Rising Credit Risk: How tariffs are reshaping the credit risk landscape across key global sectors and what early warning signs risk officers should be tracking. * Capital Allocation Strategies: How CROs and portfolio managers should reframe risk appetites given significant credit deterioration in vulnerable sectors. * Data-Driven Decision Making: The role of alternative data and credit consensus insights in scenario planning and stress testing for portfolios exposed to supply chain shocks and regulatory retaliation. * Central Bank Response: Potential actions the Fed and ECB may take given impacts of tariffs on inflation, Treasury yields, and economic uncertainty. Links from today's discussion: Global Credit Risk Rising as Trade War Starts [https://www.creditbenchmark.com/data-insights/global-credit-risk-rising-as-trade-war-starts/?utm_source=LinkedIn&utm_medium=org-post&utm_campaign=Jon-Hilsenrath-Post&utm_content=Research] Speaker Bios Michael Crumpler, CEO, Credit Benchmark Michael was appointed CEO of Credit Benchmark in June 2023 after serving in several key executive roles including most recently as Chief Operating Officer and Head of Risk. He is also a member of the Executive Committee. Prior to joining Credit Benchmark in 2016, Michael worked at Goldman Sachs in the Credit Risk Management & Advisory group covering a diverse portfolio of entities across the natural resources and public finance sectors. Before Goldman, Michael spent over 10 years in other credit risk and banking roles at Barclays, Dexia and Moody's Investors Service focused primarily on energy, infrastructure and U.S. public finance. Michael holds a Master of International Affairs from Columbia University's School of International and Public Affairs and a Bachelor of English Literature from the University of North Carolina at Chapel Hill. Jon Hilsenrath, Former Wall St. Journal Senior Writer and Editor Author and 26-year veteran of The Wall Street Journal. Former chief economics correspondent, economics editor, markets editor and senior writer, based in New York, Hong Kong & Washington D.C. Pulitzer Prize finalist in 2014 for coverage of the Federal Reserve; part of WSJ team that was Pulitzer finalist in 2009 for coverage of financial crisis; contributed on-the-scene reporting to the WSJ's Sept. 11 coverage which won 2002 Pulitzer. Author of "Yellen," a biography of the Treasury Secretary and former Federal Reserve Chairwoman, book described by The Economist magazine as "elegant and erudite." Wilson Center Fellow, 2021. Cum laude graduate of Duke University, Knight-Bagehot Fellow at Columbia University with MBA and M.A. Hong Kong University of Science and Technology alum. Partner of Duke economics department as Visiting Fellow. Moderator Katherine Wolicki, Global Head of Engagement and Outreach, GARP Benchmarking Initiative (GBI) Katherine is the Global Head of Engagement and Outreach for GARP Benchmarking Initiative (GBI). GBI plays a key role in supporting evidence-based policymaking through the provision of industry benchmarking studies. Prior to this she was with HSBC for 12 years where she led the Global Financial and Model Risk Regulatory Policy and Engagement team for Risk. The team was responsible for the external regulatory interface for the Traded Risk, Treasury Risk Management and Global Risk Analytics function. This included the provision of guidance on regulatory risk matters, regulatory policy interpretation and industry engagement. Prior to this she was based in Brussels as a Public Affairs consultant specialising in financial services regulation. Katie has an MA in International Economic Relations from American University and a Maîtrise in European and International Law from the University of La Reunion. She is a fluent French speaker and an avid hiker and mountaineer. About Credit Benchmark Credit Benchmark is a leading provider of credit risk data and analytics. The company aggregates and anonymizes contributed risk data from over 40 global financial institutions, producing unique obligor-level Credit Consensus Ratings and other key credit metrics. Covering over 110,000 legal entities, 90% of which are not publicly rated—Credit Benchmark's insights are trusted by major financial institutions worldwide to enhance their internal credit risk analysis and gain accurate risk perspectives.

AgenticAI: The Next Frontier in Intelligent Decision-Making

Hear from Zeynep Tunc at SAS, who is leading risk management activities across Northern Europe, to learn about AgenticAI, a groundbreaking approach to decision making that interacts dynamically with its environment to achieve specific goals. Key topics: * How AgenticAI differs from traditional AI through dynamic environmental interaction * The technology behind the revolution: reinforcement learning, decision theory, and cognitive modeling * Real-world applications in autonomous vehicles, loan approvals, portfolio management, and collections * Critical ethical considerations including transparency, accountability, and bias mitigation Featuring insights from cutting edge research, including a Cambridge University project on self-driving cars, this episode maps the future landscape of AI-driven decision making. Relevant links: Rethinking risk: Smarter models, better decisions [https://www.sas.com/content/dam/SAS/documents/marketing-whitepapers-ebooks/sas-whitepapers/en/credit-risk-modeling-digital-age-109772.pdf?utm_source=garp&utm_medium=content-syndication&utm_campaign=-global] Discover your organisation's Gen AI preparedness vs others - try the SAS GenAI benchmark tool [https://www.sas.com/en/offers/curiosity-benchmark-interactive-experience.html?utm_source=garp&utm_medium=content-syndication&utm_campaign=-global#quiz] Speaker's Bio Zeynep Tunc is a credit risk professional with experience managing originations, customer management, and collections teams for consumer and small business portfolios. She joined SAS in 2022 and is currently leading risk management activities across Northern Europe. Zeynep is passionate about driving automation, seamless customer experiences, convergence of credit and fraud evaluations across customer lifecycle, AI-driven customer engagements, and working with clients to support near and long-term strategic roadmaps to drive value. Before joining SAS, Zeynep held key roles at financial institutions including Citibank, HSBC, Toyota Finance, and UniCredit, as well as software vendors such as FICO. Over the years, GARP and SAS have partnered to bring risk practitioners unique insights on a variety of topics related to risk management. Now we present a series of podcasts focused on making financial risk-based decisions in light of the rapid evolution of artificial intelligence and machine learning. About SAS SAS is a global leader in data and AI. We help organizations transform data into trusted decisions faster by providing knowledge in the moments that matter. No matter how you prioritize risk, SAS has proven solutions and best practices to help organizations establish a risk-aware culture, optimize capital and liquidity, and meet regulatory demands. SAS® provides on-demand, high-performance risk analytics to ensure greater efficiency and transparency. Strike the right balance between short- and long-term strategies. And confidently address changing regulations and manage compliance. Discover why 90% of the Fortune 100 use SAS. sas.com/riskmanagement [https://url.us.m.mimecastprotect.com/s/9A1xCL90PxskV185UBfVcy53R3?domain=sas.com].

Inside the Mind of a Buy-Side CRO

Hear from Peter Mortensen, the chief risk officer of Russell Investments, about inflation volatility, tariffs, liquidity risk, AI threats and benefits, and ERM. Across the financial services spectrum, amid a global environment of uncertainty and political upheaval, risk management is as daunting as ever in 2025. Banks, for example, must contend with everything from cybersecurity hazards and the rise of AI to regulatory risk, global debt problems and increased supply-chain risk. Investment managers, meanwhile, face many of the same challenges but are also concerned with portfolio management, inflation volatility, the introduction of new tariffs, stress testing and liquidity risk obstacles. Peter Mortensen, CRO of Russell Investments, joins us today to share his insights on the risk trends, challenges and opportunities impacting the global investment management community. Relevant Links: GARP Benchmarking Initiative [https://www.garp.org/garp-benchmarking-initiative] Speaker's Bio Peter Mortensen is chief risk officer at Russell Investments, where he is responsible for measuring and monitoring market and liquidity risks for the firm's risk management program and regulatory reporting. He was promoted to CRO in June 2023, after serving a stint as the firm's managing director of investment risk. In his current role, Peter also oversees the development, daily operation and support of Russell Investments' proprietary multi-asset enterprise risk management system, which facilitates quantification of market, liquidity, credit and concentration risks. Since July 2015, he has assisted the CFA Institute with their curriculum development on risk management. Prior to joining Russell Investments in 2012, Peter worked as a senior risk analyst in the product solution group at Nykredit Bank. In that role, he was responsible for the development and implementation of OTC pricing models, in addition to models for pricing expected liquidity and capital costs arising from OTC trades.

Forecasting 2025: Risk Trends and Predictions

Hear from Moody's Analytics' Cris deRitis about cybersecurity, AI, deglobalization, regulatory risk, global debt problems, geopolitical volatility, supply-chain risk, and other key issues that will impact risk managers this year. In 2024, the complex obstacles facing financial institutions and their risk managers were illuminated by headline-grabbing risk events – including the CrowdStrike IT outage, the fall of Republic First Bank, terrorist attacks on commercial shipping vessels in the Red Sea, and a plethora of climate-change-abetted natural disasters. Indeed, multi-faceted risks - ranging from rising cyber threats, third-party risks and AI encroachment to evolving regulatory and climate risks to geopolitical volatility and supply-chain uncertainty – created a very challenging environment. Part of the problem is that many of the major risk types are interconnected and distributed across multiple transmission channels. For example, cybersecurity not only covers ransomware attacks and internal breaches but also requires monitoring of threats from both third-party vendors (like CrowdStrike) and from AI tools, like deepfake technology, used by cyber criminals. Likewise, geopolitical risks, such as the Russia/Ukraine and Israel/Hamas wars, have a major impact on the supply chain. This year, risk managers can expect to face many of the same issues, while also tackling global debt problems, deglobalization, political upheaval, and even greater AI, cyber and third-party hazards. Relevant Links: Modeling Risk [https://www.garp.org/risk-intelligence/modeling-risk/all] (GARP column by Cris deRitis) GARP Benchmarking Initiative [https://www.garp.org/garp-benchmarking-initiative] GBI Study on Operational Resilience: Key Findings [https://www.linkedin.com/feed/update/urn:li:activity:7280622392341663744] Speaker's Bio Cristian deRitis is Managing Director and Deputy Chief Economist at Moody's Analytics. As the head of econometric model research and development, he specializes in the analysis of current and future economic conditions, scenario design, consumer credit markets and housing. In addition to his published research, Cristian is a co-host on the popular Inside Economics Podcast [https://podcasts.apple.com/us/podcast/moodys-talks-inside-economics/id1559966912]. He can be reached at cristian.deritis@moodys.com [cristian.deritis@moodys.com].