Wednesday, February 20, 2019
Is the Financial Crisis caused by inefficient financial data management or financial models or both? Essay
This question is posed at the conclusion of As Securities turn over more than Complex Is Financial Data Management beseeming More Complex? by Jeffrey Rooney. This paper discusses OTC differential coefficients as an example of how the pecuniary crisis escalated and Enterprise Data Management (EDM) as a monetary info model that offers a solution to data problems faced by the industry. found on Rooneys presentation the monetary crisis is a symptom of uneconomical financial data management which is the result of intentional use of poor people financial models coupled with the intentional misuse of financial models.Poor financial data management has a cultural and technological basis. The cultural agent is the Chinese wall or siloed business unit structure which facilitates and operates on the intentional misuse of financial models for the purpose of preserving the identity and autonomy of commutative business units. The technological component includes other issues such as u nification activities and disparate legacy systems (Rooney 2009, p.2) which results in either use of poor financial models or provides no framework for effective financial models at all.The IBM-World depone currency swap was structured with the goal of avoiding highly regulated groovy markets and regulation by affected countries. This was a $290 million transaction which paved the way for the creation of the now $700 trillion OTC derivative market. (Rooney 2009, p.3) As a result of these inefficiencies a financial crisis has occurred in multiple sectors of the financial markets.The financial crisis is the result of the systematic use of poof financial models and ineffective data management strategies built around the uncomplicated goal of expanding the derivative market. Avoiding regulation and hiding the complexity of derivative transactions is a primary goal of, resulting in, the inefficient financial data management and financial models.BibliographyRooney, J. (Spring 2009) As Securities Become More Complex Is Financial Data Management Becoming More Complex? FinTech Project. Polytechnic Institute of NYU Finance and Risk Engineering.