The Hindu Business Line : New ways in risk management

THE real time techniques used in India to manage risks are far superior to the end-of-day tallying techniques used in the US, Dr R.H. Patil, Chairman of Clearing Corporation of India said at the Indian Institute of Management, Kozhikode.

Speaking at the finance seminar on `Risk vs Reward - Exploring Opportunities and Business Challenges,' Dr Patil talked about the role of the central counter party (CCP) in a trading exchange. The seminar, which was organised by the Finance Students Interest group at IIM-K was inaugurated by the Institute Director, Dr Krishna Kumar.

Mr Pramod Vaidya, Head - Risk Management, IDBI Bank, talked about how risk management leads to an increase in shareholder wealth. He also touched upon the changing ways of managing risk over the years and elaborated on the integrated view of risk across an organisation like IDBI Bank.

In his presentation, Mr Arun Mittal, Head - Treasury Operations, Citibank India, talked about the risk management in treasury products. He talked about the inadequacy of all the present day models in the estimation of risk and touched upon the importance of asset liability management.

Mr C. Jayaram, Executive Director, Kotak talked about the current and future trends in asset allocation. He pointed out that India was fast moving from a nation of `savers' to a nation of `investors.'

He discussed the various popular asset allocation strategies. He also highlighted the growing importance of commodity markets and structured products in the present day scenario.

Mr Rajeev Panikath, Vice President (IT), UTI Bank talked about managing IT risks in banks. He explained the various business challenges faced by present day organisations and the need for application of information technology to manage these challenges while aligning them to the business strategy.

Prof Sameer Barua spoke about the measurement and management of portfolio risks. He emphasised on the importance of proper allocation and reallocation of funds across different asset classes. He said that scrip selection ability and market timing ability were the two main criteria in managing a portfolio.

Mr Suyash Choudhary, Fund Manager, Standard Chartered Mutual Fund, talked about the debt markets in India and the existing different perspectives of market risk. His talk dwelled upon the demand factors in the bond market like economic fundamentals, market psychology and market valuations.

Dr D.V.S. Sastry, Director General (R&D), IRDA focused on how regulators have the onerous responsibility of putting in place guidelines that are often criticised but nevertheless important to shape the industry in the future. His talk touched upon events that would have had significant influence in shaping policies in risk management.

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