Financial Institution Advantage and the Optimization of Information Processing

Content: Introduction ix     Acknowledgments xv     Chapter 1 Financial Institutions as Information Processors 1    Financial Institutions    Raison d   Etre 1     Cultural Issues 6     IT Literacy and the Spreadsheet Deluge 13     Other Challenges to Establishing an IT-Savvy Culture 19     Notes 25     Chapter 2 Strategic Hardware and Software Management 27     Overview 27     An Integrated Data Architecture 41     Information Processing Efficiency as an Institutional Objective 52     A Digression on Unstructured Data 58     Notes 60     Chapter 3 Data, Models, and Information 61     Model Risk Mania 61     Definitions and Epistemology 69     Data Quality 73     Models and Their Role 79     Regulatory Regimes and Guidance 88     Notes 99     Chapter 4 Model Risk Measurement 101     Three Phases of Model Management 102     Model Governance 103     Defining Model Risk 105     Objectifying the Downside 108     Model Risk Attribution: An Information Entropy Approach 121     Notes 126     Chapter 5 The Return on Analytic Assets 127     Measuring the Productivity of Models 128     Complementarity of Data Inflow with Information Processing 132     A Digression on Price Taking 134     Notes 135     Chapter 6 Data Risk Measurement 137     Strategic Data Acquisition 139     The Information Conversion Rate 140     Other Approaches for Data Risk Assessment 142     Notes 143     Chapter 7 A Higher Level of Integration 145     Alternate Views of Integration 146     Identifying Key Information Cycles 146     An Integrated Physical View 149     Multidimensional Information Asset Management 151     Chapter 8 A Strategy for Optimizing the Information Processing Complex 155     Evaluation 156     A Path toward Improvement 160     Notes 167     Chapter 9 Case Studies 169     The Pricing of Automobile Insurance 170     Moody   s KMV 174     The London Whale 177     The Mortgage-Backed Securities Disaster 178     The Value of Annuities 180     Notes 182     Chapter 10 Conclusions 183     References 189     About the Author 193     Index 195