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Recent Editions
Risk Channel
North America
Global banking regulators have proposed stricter standards for banks to assess risks from customers in order to avoid mismanagement. The Basel Committee, consisting of banking regulators from the G20 economies and beyond, has called for improved management of counterparty credit risks (CCR) presented by clients. The committee highlighted weaknesses in due diligence, credit risk mitigation practices, risk measurement practices, and governance and senior management oversight of CCR. The proposed guidance emphasizes comprehensive due diligence during the onboarding process of new customers and on an ongoing basis. Banks are urged to use robust contractual terms, risk-sensitive margining, and a wide range of metrics to mitigate risks. The proposal comes in response to recent cases of significant mismanagement of CCR, including the collapse of Archegos Capital Management and episodes of volatility in commodities and the UK government bond market. The revised draft guidance is open for public consultation until August.
Full IssueRisk Channel
UK/Europe
Norway's sovereign wealth fund plans to support a shareholder proposal demanding PepsiCo conduct a biodiversity risk assessment. The fund believes that the board should account for sustainability risks and the broader environmental and social consequences of PepsiCo's operations and products. PepsiCo's board, however, argues that a biodiversity assessment is unnecessary. The proposal by Green Century Capital Management warns that PepsiCo may be exposed to unnecessary risks if it doesn't fully assess its dependency on natural systems. German asset manager Allianz Global Investors also supports the biodiversity proposal. Additionally, Norway's sovereign wealth fund will vote against the compensation of PepsiCo's executive officers and the reelection of PepsiCo's chairman and CEO. The fund believes that the roles of chairperson and CEO should be separated.
Full Issue