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DTCC survey reveals risk mitigation priorities
27 March 2014
Concerns over systemic risk event decline
Despite an apparent ease in fears of a systemic risk
event occuring in the next 12 months, a survey conducted
by The Depository Trust & Clearing Corporation (DTCC)
reveals that the vast majority of financial firms have
increased spending on systemic risk mitigation.
The DTCC Systemic Risk Barometer analyses information provided
by 218 respondents, including broker/dealers, banks, service
bureaus, mutual fund companies, hedge funds and insurance
companies. This year, the survey was further extended to
regulators, academics and members of research organisations
Only 9% of this year's survey respondents (compared to 37% in
2013) said they believed the occurrence of a high impact market
event in the next year was 'likely'.
"Even though concerns about a near-term destabilising market
event appear to be abating, it is gratifying to see that this
has apparently not translated into complacency and that the
industry is becoming more diligent about protecting itself from
such occurrences," said Michael Leibrock, DTCC chief systemic
"Of the individuals we polled, 70% reported that their firms
had committed more resources to systemic risk management
activities over the past 12 months."
Respondents once again ranked the 'impact of new regulations'
and 'cyber security' as the first and second most relevant
risks to their firms. The third, fourth and fifth most relevant
risks were 'a significant business continuity event';
'disruption or failure of a key market participant'; and 'a
major compliance or governance event'. These did not change
materially from the 2013 survey.
When asked to rank the top risks relevant to the broader
economy, the findings were similar with cyber security ranked
first, followed by the impact of new regulations; a US
recession; disruption or failure of a key market participant;
and liquidity risk - an option added in this year's survey.