GLG News by Pension Accounting Specialists

As foreign and U.S. companies get to choose accounting rules by which they will abide, institutional investors must: 1. Understand what the different standards mean in terms of an accounting - economics "gap" 2. Identify whether a reporting entity is perversely changing its behavior to game a...

1. Pension fiduciaries are obliged to manage risk in a prudent fashion.2. Current regulatory guidance requires pension fiduciaries to ask tough questions of their money managers (hedge, mutual, private equity) about risk controls, use of derivatives and risk analysis techniques.3. Everyone stands to...

The problems of subprime lending are hot topics.  Lack of underwriting standards and poor pricing are the primary concern.However lenders need to understand the cure or reaction to such concerns can cause even more harm.  Financial analysts need to understand how their clientele (e.g., banks)...

The attached article highlights the fact that banks are tailoring more products to an aging population.  Good businesses and industries evolve to meet the changing needs of the market place.  However new products also pose risks.  Financial analysts need to focus on the risk, as...

1. The global derivatives market is huge and growing.2. Many mutual funds employ derivatives.3. Investors want to read the fund's prospectus.4. There are many questions an institutional investor must ask before committing money to a fund that employs derivatives.

1. Many global financial institutions have Chief Risk Officers.2. The risk function is being addressed more often by the board, something that this post's author advocates for pension funds.3. There is a cited need to do more work in the area of credit and energy derivatives.4. Not all financial institutions...

The consolidation of the banking industry has been, and will continue to be a continuous process.  The reason is economics.  However this process should intensify during the next several years because of regulation, specifically the Basel II accord.

Pension fund management has historically focused on maximizing return.  However today, risk management is taking center stage.  General Motor's announcement focuses on this point. 

Pension funds are embracing a new opportunity in property derivatives.  First, managers of pension funds must be careful to understand the derivative, its underlying asset, and the impact on the return/risk of the pension fund's portfolio.  Second, managers of pension funds can not focus on...

Ford faces two major problems with its massive restructuring/downsizing. First, operationally it is very difficult to cut costs by more than you cut revenues when you downsize. Second, some will question the quality of Ford’s post-restructuring earnings, since many companies in the past have used downsizings...