What do risk managers do for a living? A new semantic web ontology and a collection of articles at the Open Risk Manual aim to put some machine readable structure around the question!

• Blog Post
• Live Ontology
• Job Description Catalog

Enjoy!

Monte Carlo simulation can be used when the model we want to understand is too complex to yield explicit analytic models. Complexity in a system may arise from many underlying architectural characteristics. Through the use of random numbers simulation aims to address the curse of combinatorial explosion that plagues the analysis of complex systems. In this new blog post we go over a simple simulation exercise where we tackle the challenge that with 51 states and a specific allocation of the 538 electoral votes there are many permutations ("paths to victory") that lead of the desired grand total of 270 or more votes. Read more about how this simulation was setup (spoiler alert - there is nothing politically relevant here!) what we might expect to see on the basis of the law of large numbers and the central limit theoreme and watch an animated video of how the simulation statistics starts accumulating! Enjoy

As an architectural design and information technology approach, federation has received increased attention in domains such as the medical sector (under the name federated analysis), in official statistics (under the name trusted data) and in mass computing devices (smartphones), under the name federated learning. In this (the first of series of three) white paper, we introduce and explore the concept of federated credit systems.

We introduce a number of fundamental business entities (sub-units) and their associated functions and discuss the underlying business models. We discuss, in particular, how and why they exchange data and metrics and the key risk management challenges of each. Finally, we sketch current architectures for credit information sharing with an overture to the new possibilities opening up with federation architectures.

• You can find the white paper here
• Get involved in open source software development of federated credit systems.

The latest release of transitionMatrix library (0.4.7) expands the documentation and example set. The Academy Course PYT26038 (Analysis of Credit Migration using Python TransitionMatrix) that takes you step by step through the basics of using the library. There are five steps (course sections) that cover the main functionality of the TransitionMatrix package, with applications to a variety of synthetic and real credit data. The examples used in the course are also available in the github repository (for those who do not like to type :-) A little bonus: Sankey diagrams are very useful for the visualization of flows, especially when there is a conserved quantity. They can be tricky when some of the flows are much smaller than others such as is typically the case with credit rating transitions. In the latest release of transitionMatrix we include an example of a log-scale version of Sankey

The summer is over in the Northern Hemisphere - and what an unusual summer has it been! Worldwide the implications and challenges of adjusting to a Covid-19 pandemic are still a major issue, affecting individuals, companies and governments. The pandemic underscores the serious challenges of risk management methodologies, not unlike the serious stresses exposed during the Great Financial Crisis. If the GFC led us to formulate the Open Source Risk Modeling Manifesto, the present crisis is even more fundamental and far-reaching. It underscores how modern economies (and financial systems) have fundamental vulnerabilities that are routinely neglected even while they are real and present dangers. The shift into sustainable economies (and thus sustainable finance) will both have to accelerate and broaden in the coming years. We believe the mission of Open Risk is more than ever aligned with the required direction of travel. Welcome back to the Academy to both old and new students! Check out some new features we have just released as part of the Back-to-School 2020 and do give us some feedback how to improve the Academy!

A game (in the serious gaming genre) that aims to help with understanding concepts of credit portfolio managemen such as name concentration

• The online documentation
• The code repository