DTCC Connection

Nov 29, 2016 • DTCC Connection

DTCC Risk Forum: Resilience and Transparency

Michael Bodson, DTCC President and CEO
Opening Remarks
November 15, 2016


Good morning, thank you all for joining us today. I also want to thank our Risk team for organizing this event and bringing together risk managers from across the industry to discuss the critical issues that we’re facing right now.

DTCC Group Chief Risk Officer Andrew Gray spoke briefly about the evolution and expansion of risk management and, more generally, how systemic risks are becoming more severe, unpredictable and frequent. I want to pick up on this thought as it will underpin much of the discussion we have today.

Because risk is an inherent part of financial markets, financial firms need to become more resilient to protect against an ever-growing list of systemic threats.

But what do we mean by that?

Resilience isn’t simply about the ability of a firm to return to its original state after a shock. Rather, because we take a holistic view of risk, we know that in a complex and interconnected environment resilience needs to be evolutionary and adaptable. Resilience allows us the capacity to grow beyond where we were at the time of a shock, and to adjust our actions going forward based on the lessons of our experience.

There are many building blocks to increasing resiliency, but one of the most critical is transparency. I’m reminded of a famous quote from Warren Buffett: “You only find out who is swimming naked when the tide goes out.”

Buffett is right about that, but the problem is that we can’t wait for the tide of the next crisis to see who is naked, or at least unprepared. As a result, we need to increase transparency to better guard against risk, to better withstand future shocks, and to be better prepared to adapt and learn from them in the future. That is why we’re here today.

Read the full text of remarks by Michael Bodson, DTCC President & CEO (pdf)

dtccdotcom