There's little question the financial industry needs a way to accurately gauge, predict and price operational, market, credit and even systemic risk, for regulatory and institutional use and for the accurate pricing of assets and insurance products like CDS.
At a time when some legislators are calling on the Federal Reserve to begin regulating systemic risk in the U.S., IBM data guru Steve Adler has become the leading evangelist for an effort to create a global standard for reporting loss events to regulators. The hope is that the standardized data could be aggregated, and then fed back to the industry to improve institutions' trending and forecasting, and to enable a viable insurance market for some kinds of risk. "The challenge is getting people to agree on what things are called," says Adler, chair of IBM's Data Governance Council. "Just the term 'risk' itself is charged."