European Investment Bank – Risk Management (and Greece)
On Friday 9th March, Thomas Schroeder of the European Investment Bank (EIB) gave an excellent seminar to our quantitative finance research students. I got a rough grasp of techniques for managing financial risk, (market risk, credit risk and liquidity risk) but didn’t understand the technical details. However, what was very clear was that practitioner-led innovation leads to new research problems.
I was there not to learn about risk management, but to share expertise about Bloomberg. It is always useful to talk to and observe other Bloomberg users, especially if they have a different area of expertise. You inevitably learn something. Thomas pointed out the audio-visual news and Bloomberg TV. You don’t always have to read the news: you can listen or watch and listen.
Friday 9th March was the day that Greece would announce how many private bondholders had accepted the debt restructuring deal and whether the Collective Action Clause (CAC) was being invoked. Finally, the International Swaps and Derivatives Association (ISDA) had to decide whether a credit event had occurred.
Bloomberg news search TNI with keyword ISDA and topic AV shows a Bloomberg news interview the ISDA’s Geen explaining this. (This was one of the home page items on AV on 12 March and on the Most Watched list on 13 March.)
When it comes to getting information on interest rate swaps and currency swaps, professionals at EIB pay more attention to the current market (what different participants are quoting) while researchers take more interest in getting historical data.
Tips for getting historical data: the Baker Library at Harvard Business School has “Bloomberg: options” and “Bloomberg: futures” as its two most viewed Bloomberg Fast Answers.
Finally, if you want to find out more about the European Investment Bank you can use Bloomberg for that too. Type European Investment B… on the command line and select one of the EIB bonds from the predictive search options (securities). Type RELS (Related Securities) and you will get this page giving access to the EIB description, news, management and all its bonds.