Using Data for Systemic Financial Risk Management

The recent financial collapse has laid bare the inadequacies of the information infrastructure supporting the US financial system. Technical challenges around large-scale data systems interact with significant economic forces involving innovation, transparency, confidentiality, complexity, and organizational change, to create a very difficult problem. The post-crisis reform legislation has created a unique opportunity to rebuild financial risk management on a solid foundation of information management principles. This should help reduce operating costs and operational risk. More importantly, it will support both the monitoring and the containment of financial risk on a previously unprecedented scale. These objectives will pose several information management challenges, including issues of knowledge representation, information quality, data integration, and presentation. This paper presents a vision of an information-rich financial risk management system, and a research agenda to facilitate its realization.