MONITORING RISK WITH V-LAB

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Presentation transcript:

MONITORING RISK WITH V-LAB Robert Engle Director of Volatility Institute At NYU Stern Isaac Newton Institute, Cambridge

VLAB.STERN.NYU.EDU Or Google vlab There are four main regions on V-LAB Volatility Correlation Systemic Risk Long Run Risk Liquidity Lets take a look at each before turning to systemic risk.

WELCOME PAGE

SECTORAL CHANGES IN VOL

S&P VOLS

MORE INFORMATION

COMPARISON OF ASSET CLASSES

RUSSIAN ASSETS

MICEX, MOSCOW

OTHER MARKETS

CDS AND EQUITY

COMMODITY CORRELATIONS

ASSET CLASS CORRELATIONS

Systemic risk

DEFINITION How much capital would a financial institution need to raise in order to function normally if we have another financial crisis? We measure this econometrically based on market data on equities and balance sheet data on liabilities. We update weekly on V-LAB for US and Global financial firms. We call this SRISK. Principle investigators: Viral Acharya, Matt Richardson and me at the Volatility Institute at NYU’s Stern School. Collaboration with HEC Lausanne and the Institute for Global Finance at University of New South Wales. Contributions by Christian Brownlees, Rob Capellini, Diane Perriet, Emil Siriwardane. References: Acharya, Pedersen, Phillipon, Richardson “Measuring Systemic Risk (2010); Acharya, Engle, Richardson “Capital Shortfall, A New Approach to Ranking and Regulating Systemic Risks, AEAPP (2012), Brownlees and Engle, “Volatilities, Correlations and Tails for Systemic Risk Measurement”,2010

GLOBAL SRISK SINCE 2000 8/8/2019 VOLATILITY INSTITUTE

WHERE IS THE RISK today? 8/8/2019 VOLATILITY INSTITUTE

US SINCE 2000 8/8/2019 VOLATILITY INSTITUTE

ASIA SINCE 2000 8/8/2019 VOLATILITY INSTITUTE

CHINA and JAPAN 8/8/2019 VOLATILITY INSTITUTE

EUROPE SINCE 2000