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On Thursday 13th November PRiM (the association of risk management professionals in Luxembourg) organised an evening seminar which sought to provide, “An update on large exposures,” an issue that has leapt up manager’s agendas in recent months thanks to the likes of Lehman Brothers, Société Générale and Bear Stearns (to name but a few…) The guest speaker was Michel Dorval of Thomson Reuters Risk Management. “Regulators are currently working on guidelines governing large exposures,” he began, “But there is some concern that these new rules could increase complexity for banks, already laden with regulation.” Under current guidelines, a large exposure is considered to be where exposure to an individual counterparty of group of related companies exceeds 10% of the bank’s own funds. The rules...
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