According to a recent Managing Risk and Valuation survey by Bloomberg, geopolitical risks are a rising priority for market participants, as supply chain risks and cyber related risks follow behind. After surveying more than 200 market participants, more than one third named geopolitical risks as their top concern in the next one to three years.
The survey shows firms are struggling to confront traditional financial risks with confidence, as responses are divided on the state of market liquidity. Firms are also split on their strategy to enhance their credit risk frameworks, as 26 percent are considering making changes, 24 percent are considering automating manual tasks, 21 percent are looking to add additional early warning indicators and 21 percent want to conduct scenario analysis.
"Financial institutions face a diverse set of challenges: geopolitical uncertainty, inconsistent liquidity assessments and legacy credit risk frameworks. Like a sophisticated rada