Stress Testing – Holistic firmwide risk assessment

Stress Testing – Holistic firmwide risk assessment

By Fabrice Fiol, Managing Director, Societe Generale

Can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

My official title is Managing Director, Deputy Head of Enterprise Risk Management for the Americas at Socgen. I joined SocGen in 2009 and prior to that was part of the front-office at two different institutions covering interest rate derivatives and then Agency CMO Mortgage Back Securities

You are participating in a panel discussion to review industry perspectives on incorporating stress testing into BAU to make the process more efficient and meaningful. What do you think will be the key talking points amongst panellists and why?

I am looking forward to exchanging view points on various topics, ranging from the evolution of stress testing to articulating risk appetite firmwide, while touching upon emerging risks and technology breakthroughs. I am hoping I can learn from my fellow panelists and also engage with many of my peers who are facing similar challenges.

What are the key considerations that need to be made when aligning global and different types of stress testing?

I think it is important to develop and enhance models and techniques, but at the same time governance and structure are a key component of a sound risk management approach. Risk and more broadly support functions should engage with the business lines while making sure the approach is comprehensive and encompasses the various risks their insitutition is facing.

Can you provide us with a few examples of considerations to incorporate non-financial risk drivers and black swan types of events and new technologies?

We often hear about fintech disrupting the financial sector , crypto-currencies volatility, and cyber-risk being critical for many companies, beyond the financial sector.

One has to remain humble in our ability to predict the driver of the next crisis, let alone the timeframe or the severity. This being said, I believe we have to embrace new technology to create a more efficient risk framework.

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