London – 28 September 2022: Market risk has become the top concern of senior capital market executives, surpassing cyber risk for the first time, the latest KRM22 Capital Markets Risk Sentiment Index (CMRSI) has found.
The KRM22 CMRSI, compiled by management intelligence provider Acuiti, is a measure of how senior executives perceive a variety of risks facing their business, how prepared they are to deal with them and where firms are investing in risk management.
The H2 2022 survey, coming in the wake of a period of intense volatility across global markets, found that market risk has become the primary concern for senior market practitioners.
“Ongoing volatility across capital markets has resulted in a major increase in the risk of serious market dislocation,” says Will Mitting, Founder and Managing Director of Acuiti.
“Significantly the H2 2022 Capital Markets Risk Sentiment Index also finds that senior executives feel less able to mitigate the threat of market risk as concerns about this factor grow.”
The survey also found that concerns over counterparty risk had increased – rising to third in the index – as margin calls and sharp market moves in the wake of war in Ukraine and rising inflation increased pressure on companies’ ability to navigate markets. This time last year, counterparty risk was the 6th biggest concern.
The risk of fallout from Brexit has also risen up the index to 9th from 16th this time last year and 13th in H1 2022 as the process to select a new lead of the Conservative Party in the UK raised renewed threats to diverge from Mifid II and other EU rules.
The overall levels of risk reported by firms has continued to increase over the past six months with 65% of respondents reporting an increase in overall risk levels and 14% reporting a significant increase.
This compares with just 31% reporting increases in risk this time last year but follows a similarly sharp increase in risk levels reported in the H1 2022 survey, which coincided with the Russian invasion of Ukraine.
For more information, contact Will Mitting
Tel.: +44 (0) 203 998 9190
Acuiti is a management intelligence platform designed to provide Senior Industry Professionals in the Derivatives Industry with high-value insight into industry-wide performance and business operations. Acuiti provides a platform through which our exclusive network of Senior Industry Executives can share and source information on day-to-day operational challenges, providing them and their management teams with increased transparency and in-depth analysis to make more informed decisions and benchmark company performance. Financial Institutions benefiting from our services include Banks, Non-bank FCMs, Brokers, Proprietary Trading Firms, Hedge Funds and Asset Managers.
KRM22 is a specialist software investment business led by industry experts, with an investment focus on risk management software and technology predominantly for capital markets. KRM22 envisions a world in which capital market organizations operate at an optimal threshold of risk to improve alpha and drive increasing profits. It is our mission to deliver a Global Risk Platform that brings increased visibility of risks to CEOs and senior executives while simultaneously lowering the cost of risk management systems to capital market organisations.