Comments
Patriot Missiles for the Market
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Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
5/21/2014 | 11:16:10 AM
Re: What's taking so long?
I agree that they some of the firms still don't see the incentive today in focusing more on risk management. But eventually, as losses pile up, that should change and we'll start to get more focus and more creativity put into risk management tools and strategies. Otherwise the industry woul be sending a message that it needs tighter regulation in this area, and that is definitely not a message that anyone wants to send.
Michael Endler
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Michael Endler,
User Rank: Apprentice
5/21/2014 | 10:20:57 AM
Re: What's taking so long?
"I think it's taken so long to get there because profit always trumped risk mitigation."

+1

That was basically my thought. Before the financial crisis, I doubt the banks saw any incentive in prioritizing mitigation techniques. To be honest, I'm not that convinced they feel much incentive even today, or that their definition of "bad behavior" would reconcile well with the public's. Nevertheless, this is an interesting concept and article.
DrJohnBates
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DrJohnBates,
User Rank: Author
5/20/2014 | 10:34:37 PM
Re: What's taking so long?
I think it's taken so long to get there because profit always trumped risk mitigation. After 2008 that started to change. However, also I don't think compliance departments always know what is possible. They don't have the heritage in low latency tech that trading groups had. Hopefully the message is getting through now. Reputational risk is so high that the best approaches need to be considered.
IvySchmerken
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IvySchmerken,
User Rank: Author
5/20/2014 | 10:07:02 PM
Re: What's taking so long?
Since many banks use these technologies - algorithms, complex event processing and data visualization - to find trading opportuniteis it's surprising that the don't apply them to identify and stamp out unwanted market behaviors. All it takes is one rogue trader to cause a multi-billion loss. Yet developing a Patriot Missile for catching negative behaviors could pay off if prevents the next crisis. Imagine if some banks had this technology to identify the LIBOR rate rigging scandal or thwart the latest money laundering episode.

 
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
5/20/2014 | 9:39:47 PM
What's taking so long?
With all of the regulatory and compliance burden placed back on the banks, why is it taking so long for firms to apply data analytics tools/technologies to help uncover bad behaviors? I wonder if there are so many things that companies need to monitor, that they don't know where to start.


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