The Squam Lake Report, a collaborative effort by leading economists and financial experts, emerged from discussions surrounding the 2008 financial crisis. It provides a comprehensive analysis of the causes of the crisis and offers recommendations for regulatory reform. The report emphasizes the importance of systemic risk management and highlights the need for greater transparency and accountability in the financial system. It explores various policy options, including changes to capital requirements, liquidity regulations, and oversight mechanisms. The report's insights have significantly influenced regulatory debates and policy decisions in the aftermath of the crisis.
Daryl Duffy's "How Big Banks Fail and What to Do About It" offers a critical analysis of the factors contributing to bank failures, particularly focusing on the events leading up to and during the 2008 financial crisis. The book delves into the complexities of systemic risk and regulatory shortcomings, providing insights into the interconnectedness of financial institutions. Duffy examines the role of leverage, liquidity, and risk management practices in exacerbating financial instability. He proposes concrete policy recommendations aimed at strengthening the resilience of the banking sector and preventing future crises. The book is a valuable resource for policymakers, regulators, and anyone interested in understanding the intricacies of the global financial system.
In this episode, we continue our exploration of financial risk management with Eric Schaanning, a thought leader in the field. Following his dynamic insights from the previous discussion, Eric delves into the intricacies of treasury functions within major banks and their critical role in risk management. Together with Guy Spier, they unravel how a small treasury team, despite its size, manages significant financial risks compared to the larger pool of relationship managers.
Listeners will gain a clear understanding of complex concepts like yield curves and risk spreads, as Eric adeptly explains their implications in today's banking landscape. The duo examines the Basel Committee on Banking Supervision (BCBS) scenarios for interest rate shocks, pondering whether current banking models can adequately address extreme interest rate fluctuations.
As they venture into discussions on net interest income (NII) and the economic value of equity (EVE), Eric shares his expertise on how these concepts can be applied to personal finance, making the conversation relevant for individuals navigating their own financial landscapes. With an engaging blend of practical knowledge and theoretical insight, this episode offers valuable perspectives that push the boundaries of traditional risk management. Tune in for another captivating dialogue that not only expands your understanding of financial systems but also equips you with practical tools for managing your financial future!
Full transcript available here: https://aqfd.docsend.com/view/dyu45ikdqvarwf5p
Here's a link to the presentation: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5007032
Contents:
(00:00:00) Navigating Interest Rate Risks: A Deep Dive into Bank Balance Sheets
(00:08:57) Measuring Interest Rate Risk: Insights into NII, EVE, and Bank Profitability
(00:17:09) Banking on Transparency: The Impact of Regulatory Frameworks opn Financial Institutions
(00:31:18) Gap Risk in Banking: Insights from the Delta EVE Measure and Silicon Valley Bank
(00:39:56) From Crisis to Regulation: The Evolution of Interest Rate Risk Management
(00:53:52) Balancing Act: Large Banks, Regulation, and Operational Challenges
(00:59:21) Bridging Capital and Growth: Perspectives on Modern Banking
(01:23:55) Treasury Functions Unveiled: The Backbone of Risk Management in Banking
(01:29:02) Understanding Interest Rate Shocks: A Comprehensive Look at the BCBC Scenarios
The Education of a Value Investor 
