Highlights from 2015 RPC and a Look Toward Next Year

When Moody’s launched an industry conference called Credit Practitioners Conference 10 years ago, it was primarily focused on single obligor and portfolio credit risk. Over time, the conference has become bigger and broader. In 2010, the event was renamed Risk Practitioners Conference (RPC), acknowledging the expanding range of interests from industry participants and the growing range of solutions from Moody’s Analytics. The 2015 conference attracted 300 attendees from about 100 global institutions. Participants represented financial institutions large and small, as well as bank supervisors. Interestingly, as Finance and Risk are increasingly working together on areas like stress testing and CECL/ IFRS 9, there were also prominent speakers and attendees from Finance functions.

One theme underpinning many sessions was data and data quality as the foundation for better risk management and capital planning. Firms are thinking about how to improve foundational risk management and risk identification, and how to extract greater value from their data and infrastructure investment beyond basic regulatory compliance. Model risk management is a topic at the forefront of everyone’s mind as the supervisory expectations, particularly in the US have risen sharply. In fact, firms are thinking of how to get more out of stress testing, leveraging some of the same models, systems, and regimens to improve business-as-usual processes like limits management and the Risk Appetite Framework.

The accounting regulations should continue to evolve over the next year, so there will be more concrete discussions about modeling for ALLL. There are still open questions about how to get an integrated and comprehensive view of risk at the top of house, how to integrate liquidity and capital views, and approaches to liquidity stress testing results and capital optimization. I would also expect an even more diverse group of attendees as we will be dealing with the integration of more and more BAU Risk processes with required regulatory processes like stress testing. However, I suspect that the series of bank and regulatory round tables Moody’s Analytics will host in the spring and summer will inform the choice of topics for the RPC 2016.