This paper explores three notable #quantumcomputing applications in the realm of #centralbanking, including assessing #financialrisk, #creditscoring, and #transactionsettlement. Although these applications are currently in the proof-of-concept stage, they highlight the emergence of new software paradigms and potential breakthroughs. It also emphasizes the importance of carefully considering the trade-off between adopting innovative technology before it becomes mainstream and the #risk of being outpaced by more agile competitors.
"We use the recently failed #svb as a case study. Our [#machinelearning #textanalysis] findings indicate a weaker emphasis on #riskgovernance by SVB and an environment, particularly after 2011, where the #ceo became more dominant in influencing SVB’s #riskculture. We also show that despite recognition of the portfolio problems, SVB’s CEO’s tone indicated that #regulatorycompliance and #riskstrategy of the #bank would #mitigate these #risks. We observe an alignment between the #riskculture of SVB and other banks with the highest uninsured deposits as well as with two #us #gsibs."
This paper explores the use of #generativeai models in financial analysis within the Rumsfeldian framework of "known knowns, known unknowns, and unknown unknowns." It discusses the advantages of using #ai #models, such as their ability to identify complex patterns and automate processes, but also addresses the #uncertainties associated with generative AI, including #accuracy concerns and #ethical considerations.
This paper introduces the concept of differential privacy (DP) as a novel technical tool that can quantifiably assess the identification #risks of #databases, thereby aiding in the classification of data. By allocating a privacy budget in advance, data controllers can establish auditable and reviewable boundaries between #personal, #anonymous, and #pseudonymous data, while integrating this framework into broader data #riskmanagement practices.
This article highlights the importance of #cybersecurity in contemporary business models and the need for #legal practitioners and #it professionals to work together to assess the extent to which #privacy and #security measures qualify as "appropriate" in the context of #liability #claims and actions for #damages. The article provides guidance on how to move from technical insight to legal #compliance.
Key findings:1. #masstort plaintiff lawyers do not primarily base their litigation and settlement strategy on defendants' #liabilityinsurance, except in cases of insolvency.2. Despite #insurance policies assigning control over defense to the #insurer, mass tort defendants typically retain control over their defense, even when they recover under these policies.3. Mass tort defendants usually use their own funds to settle #claims, seeking indemnification from liability insurers, if available, at a later stage.4. Many mass tort plaintiff law firms rely on non-recourse litigation funding, reminiscent of early forms of commercial insurance like bottomry and respondentia. An emerging insurance market is reducing the cost of this funding and may eventually replace it.
Logistic #regressionanalysis identified significant #predictors for attitudes towards relocation and #floodinsurance decisions. The study found that low-magnitude #flood #scenarios had predictive models, while high-magnitude flooding did not. Flood insurance ownership emerged as a significant predictor for staying after flooding.
#generativeai AI offers opportunities to enhance #operationalriskmanagement #orm through its ability to analyze #unstructureddata, #simulate #risk #scenarios, and #automate tasks. However, integrating this technology into ORM presents challenges, including #dataquality, #interpretability, #performance validation, #ethicalconsiderations, and organizational readiness.
#generativeai tools offer automation and innovative solutions but carry risks like #intellectualproperty infringement, #offensive or #discriminatory content generation, #databreaches, #financialfraud, and #manipulation.
"Our study extends the research on the determinants of corporate #climaterisk and impact of firm-level #politicalrisk on various corporate policies and decision-making processes. It further motivates future research on the interplay among these #risks and their effects on #finance."