Global risk outlook

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The extreme uncertainty of the global economy requires a new risk management framework. This session will examine the rapidly changing risks to the global economy and the need for new ways of behaving, making decisions and even reversing decisions. [vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Lakshmi%20Shyam-Sunder%22%2C%22job_role%22%3A%22Vice%20president%20and%20chief%20risk%20officer%2C%20World%20Bank%20Group%20(United%20States)%22%2C%22content%22%3A%22Lakshmi%20Shyam-Sunder%20was%20appointed%20vice%20president%20and%20World%20Bank%20Group%20chief%20risk%20officer%20in%20February%202014.%20She%20was%20previously%20chief%20financial%20officer%20and%20director%2C%20finance%20and%20risk%20at%20the%20Multilateral%20Investment%20Guarantee%20Agency%20(MIGA)%2C%20the%20political%20risk%20insurance%20and%20credit%20enhancement%20arm%20of%20the%20World%20Bank%20Group.%20Shyam-Sunder%20was%20one%20of%20the%20key%20contributors%20to%20the%20MIGA%2FIBRD%20Exposure%20Exchange%20Agreement%20within%20the%20Bank%20Group%2C%20and%20was%20responsible%20for%20strengthening%20and%20enhancing%20the%20finance%2C%20risk%2C%20resource%20management%2C%20IT%2C%20and%20control%20functions%20in%20MIGA.%20Prior%20to%20joining%20MIGA%20in%20March%202011%2C%20she%20worked%20at%20the%20International%20Finance%20Corporation%20(IFC)%2C%20also%20part%20of%20the%20World%20Bank%20Group%2C%20where%20she%20held%20a%20variety%20of%20positions.%20As%20director%20for%20corporate%20risk%2C%20she%20led%20the%20development%20of%20a%20new%20client%20risk%20management%20advisory%20service%20function%20for%20IFC%20clients%20and%20the%20creation%20of%20the%20International%20Financial%20Institutions%20Risk%20Data%20Consortium.%20Before%20that%20Shyam-Sunder%20was%20director%20of%20IFC%E2%80%99s%20risk%20management%20and%20financial%20policy%20department%20where%20she%20developed%20IFC%E2%80%99s%20integrated%20economic%20capital%20and%20pricing%20framework%2C%20and%20had%20responsibility%20for%20all%20financial%20risks%20arising%20from%20the%20corporation%E2%80%99s%20loan%20and%20equity%20investments%20in%20emerging%20markets%2C%20and%20Treasury%20activities%20as%20well%20as%20managing%20rating-agency%20issues.%20She%20was%20also%20co-chair%20of%20IFC%E2%80%99s%20new%20products%20assessment%20group.%20Shyam-Sunder%20has%20consulted%20for%20a%20wide%20range%20of%20public%20and%20private%20sector%20institutions%20in%20the%20US%20and%20in%20emerging%20markets.%20She%20has%20also%20served%20on%20the%20board%2C%20and%20finance%20and%20risk%20committees%20of%20institutions%20in%20emerging%20markets.%20Before%20joining%20IFC%2C%20Shyam-Sunder%20was%20a%20faculty%20member%20at%20the%20MIT%20Sloan%20School%20of%20Management%20where%20she%20received%20an%20award%20for%20Excellence%20in%20Teaching.%20Shyam-Sunder%20was%20also%20on%20the%20faculty%20of%20The%20Tuck%20School%20of%20Business%20Administration%20at%20Dartmouth%20College.%20She%20holds%20a%20Ph.D.%20in%20Finance%20from%20the%20MIT%20Sloan%20School%20of%20Management%20and%20an%20MBA%20from%20the%20Indian%20Institute%20of%20Management%2C%20Ahmedabad.%20%20Shyam-Sunder%20was%20born%20in%20Iraq%2C%20and%20grew%20up%20in%20India.%20She%20is%20married%20and%20has%20one%20daughter.%22%2C%22image%22%3A%2231887%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Flakshmi-shyam-sunder-7b24a03%2F%22%7D%5D” title=”Speaker” el_class=””][vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Amanda%20White%22%2C%22job_role%22%3A%22Director%20of%20institutional%20content%2C%20Conexus%20Financial%20(Australia)%22%2C%22content%22%3A%22Amanda%20White%20is%20responsible%20for%20the%20content%20across%20all%20Conexus%20Financial%E2%80%99s%20institutional%20media%20and%20events.%20In%20addition%20to%20being%20the%20editor%20of%20Top1000funds.com%2C%20she%20is%20responsible%20for%20directing%20the%20global%20bi-annual%20Fiduciary%20Investors%20Symposium%20which%20challenges%20global%20investors%20on%20investment%20best%20practice%20and%20aims%20to%20place%20the%20responsibilities%20of%20investors%20in%20wider%20societal%2C%20and%20political%20contexts.%20She%20holds%20a%20Bachelor%20of%20Economics%20and%20a%20Masters%20of%20Art%20in%20Journalism%20and%20has%20been%20an%20investment%20journalist%20for%20more%20than%2025%20years.%20She%20is%20currently%20a%20fellow%20in%20the%20Finance%20Leaders%20Fellowship%20at%20the%20Aspen%20Institute.%20The%20two-year%20program%20seeks%20to%20develop%20the%20next%20generation%20of%20responsible%2C%20community-spirited%20leaders%20in%20the%20global%20finance%20industry.%22%2C%22image%22%3A%2231872%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Famanda-white-101a7515%2F%3ForiginalSubdomain%3Dau%22%7D%5D” title=”Moderator” el_class=””][vc_empty_space height=”10px”]

Key takeaways

• We need to think far more broadly beyond simply financial risk, our view of risk must not be one dimensional. The crisis helps us learn and get better at modelling interconnected risks. Bigger, broader risks are interconnected and require increased collaboration to mitigate. Even if we are sitting on the fence and maintaining investment positions, risk has gone up.
• The pandemic has turned our lives not inside out, but ‘outside in’. Rather than shut down, we should ask ourselves ‘what can we do to help the situation?’
• We are in the deepest recession since World War 2, and it is completely synchronised across the world. If a vaccine is not available, the World Bank forecasts the global economy will shrink by 8 per cent.
• The pandemic has set The World Bank back in its aim to help alleviate poverty – 170 million people will remain in poverty due to the pandemic with an income of below $2 per day.
• The challenging environment is exacerbated by intergenerational and geopolitical tensions. Key question is how to exit from the pandemic stimulus measures.
• Green bonds for example are a heartening development from the financial community.
• Institutional investors are considering more non-financial risks and are engaging more deeply with investee companies. If we do this right it will mitigate, not exacerbate the issue.

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Poll results

Have you changed your attitude to risk taking because of the recent onset of unforeseeable risks including this current health pandemic?[vc_line_chart x_values=”” values=”%5B%7B%22title%22%3A%22Yes%2C%20we%20have%20taken%20risk%20off%20the%20table%20in%20our%20portfolio%20allocations%20(21%25)%22%2C%22y_values%22%3A%2221%22%2C%22color%22%3A%22pink%22%7D%2C%7B%22title%22%3A%22No%2C%20about%20the%20same%20(58%25)%22%2C%22y_values%22%3A%2258%22%2C%22color%22%3A%22sandy-brown%22%7D%2C%7B%22title%22%3A%22Yes%2C%20we%20are%20taking%20more%20risk%20as%20we%20see%20opportunities%20in%20the%20disruption%20(21%25)%22%2C%22y_values%22%3A%2221%22%2C%22color%22%3A%22sky%22%2C%22custom_color%22%3A%22%23ff9900%22%7D%5D” css=”.vc_custom_1593673826068{border-radius: 2px !important;}”]