"We ... estimate the quarterly evolution of expected losses (Capital at Risk) for the UK banking sector, and via Monte Carlo simulations the stochastic distribution of UK banks’ losses to study the severity and likelihood of tail-events (Conditional Capital at Risk). In the end, we provide insights on the impact of the Covid-19 pandemic on UK banking system’s loss distribution by decomposing the sources of average and tail risks."
“... we provide evidence that setting the risk-weighted ratio at 15\% and the simple leverage ratio at 10% would significantly decrease the probability of default without hampering banks' activities.”
The study investigated how ChatGPT and Bard categorize investor risk profiles compared to financial advisors. While there were no significant differences in the risk scores assigned by the chatbots an
The paper suggests that companies developing high-risk AI systems should demonstrate their safety before deployment, arguing for proactive risk management. It proposes a risk management approach where