Investment Risk Management - ACTEX Learning

Learn Today. Lead Tomorrow. ACTEX Learning

ACTEX Study Manual for

Investment RiskManagementSpring 2019 Edition

Richard E. Owens, FSA, MAAA, CFA

ACTEX LearningNew Hartford, Connecticut

ACTEX Study Manual for

Investment RiskManagementSpring 2019 Edition

Richard E. Owens, FSA, MAAA, CFA

Copyright © 2019, ACTEX Learning, a division of SRBooks Inc.

ISBN: 978-1-63588-602-3

Printed in the United States of America.

No portion of this ACTEX Study Manual may bereproduced or transmitted in any part or by any means

without the permission of the publisher.

Actuarial & Financial Risk Resource Materials

Since 1972

Learn Today. Lead Tomorrow. ACTEX Learning

ACTEX Learning SOA QFI Investment Risk Exam Study Manual

Table of Contents 1 Governance SOA Learning Objectives and Learning Outcomes G-1 Text: Financial Enterprise Risk Management Chapter 1 An Introduction to ERM G-3 Text: Investment Ethics Chapter 1 Introduction: The Case for Investment Ethics G-9 Chapter 2 Fiduciary Duty of Investment Professionals G-21 Chapter 3 Ethical Reporting of Investment Performance G-37 Chapter 7 Investing in Companies with Good Corporate Governance Practices G-49 Chapter 9 Cases G-73 QFII - 101 - 14 Corporate Performance, Governance and Business Ethics G-93 QFII - 103 - 14 Advances in Risk Management and Risk Governance G-99 QFII - 111 - 17 Tracing the True Origins of Bad Behavior G-105 QFII - 116 - 19 Chapter 45 Risk Management: Foundations for a Changing Financial World G-113 2 Investment Risk Management SOA Learning Objectives and Learning Outcomes IRM-1 Text: Managing Investment Portfolios, 3rd Edition Chapter 9 Risk Management (excludes Section 5) IRM-3 Text: Financial Enterprise Risk Management Chapter 8 Risk Identification IRM-21 Chapter 20 Case Studies IRM-25 Text: The Top Ten Operational Risks: A Survival Guide for Investment Management Firms and Hedge Funds IRM-43 QFII - 101 -14 Corporate Performance, Governance and Business Ethics G-93 QFII - 110 - 15 The Devil is in the Tails: Actuarial Mathematics and the Subprime Mortgage Crisis IRM-61 QFII - 117 - 19 Chapter 7 How to Deal Effectively with Major Corporate Exposures IRM-81 QFII - 118 - 19 Chapter 11Four Faces of an Interest Rate Model IRM-105 3 Risk Measurement SOA Learning Objectives and Learning Outcomes RM-1 Text: Managing Investment Portfolios Chapter 9 Risk Management (Section 5 only) RM-3 QFII - 104 – 14 Correlation: Pitfalls and Alternatives RM-17


QFII - 107 – 14 Stress Testing RM-21 QFII - 108 – 14 Basel Committee – Developments in Modeling Risk Aggregation RM-27 QFII - 110 – 15 The Devil is in the Tails: Actuarial Mathematics and the Subprime Mortgage Crisis IRM-61 QFII – 115 – 17 Liquidity Measurement and Management: A Practitioners Guide to Global Best Practices Chapter 2 RM-45 QFII – 115 – 17 Liquidity Measurement and Management: A Practitioners Guide to Global Best Practices Chapter 3 RM-63 QFII – 119 – 19 Chapter 3 The Known, the Unknown, and the Unknowable in Financial Risk RM-79 4 Practice Problems Specific problems PP-1 Problems based Learning Outcomes Topic 1 PP-60 Topic 2 PP-80 Topic 3 PP-101

SOA Learning Objectives and Learning Outcomes G-1


Topic 1: Governance SOA Learning Objectives and Learning Outcomes

I. Learning Objectives

A. "The candidate will understand the requirements and methods of governing investments."

II. Learning Outcomes

A. "The Candidate will be able to:

1. Compare the interests of key stakeholders

2. Identify sources of unethical conduct and explain the role of a fiduciary

3. Describe governance mechanisms that attempt to address these conflicts

4. Understand the importance of an organization’s culture in effectuating governance

5. Explain how governance may be structured to gain competitive advantages and efficiencies

6. Demonstrate understanding of how ethics relates to business decision-making, and relate ethics inbusiness to personal ethics."

G-2 SOA Learning Objectives and Learning Outcomes


Financial Enterprise Risk Management Chapter 1 G-3


Financial Enterprise Risk Management Paul Sweeting

Chapter 1 - An Introduction to ERM

Reviewer’s note: This chapter introduces the concept of risk in an enterprise context. It begins by exploring different definitions of risk and the rational for risk management.

I. 1.1 Definitions and concepts of risk

A. Risk has many meanings and therefore it's important to avoid ambiguity when referring to risk

1. Uncertainty over the range of possible (positive or negative) outcomes

2. Probability of an outcome different from the expected

3. Magnitude (or severity) of the deviation from the expected outcome

4. Probability times severity is expected value of a loss

5. Most common (layman’s) definition is the possibility of adverse outcomes

6. Exposure to loss or the maximum loss that could be suffered

7. Risk may refer to a future uncertain event or a past event that has not been assessed, or even the fact that a particular risk has not been identified or recognized

8. Concentration/diversification effects and time horizon are important considerations

B. ERM definitions and concepts

1. Defined as the management of all risks on a holistic basis – not just management of each individual risk

a. Includes both easily quantifiable risks and difficult to quantify risks

b. Must consistently assess risks across the organization – both diversification's and concentrations of risk

i. Precludes a silo approach

2. ERM implies a process

a. Recognizing context

b. Identifying risks

c. Assessing and comparing risks with risk appetite

d. Deciding the extent risks are managed

e. Take appropriate action

f. Reporting and reviewing actions taken

G-4 Financial Enterprise Risk Management Chapter 1


3. Formal process with details at each stage results in an ERM framework

a. Emphasis on process not one-time event – integrated into day-to-day operations

b. Requires presence of the central risk function headed by the CRO, reporting to the board

c. Takes time and requires commitment to implement and is not a magic bullet against risk

II. 1.2 Why manage risk?

A. Broadly speaking, it benefits society – as recent global liquidity crisis illustrates

B. Arguably a key function of the Board of Directors is to, not remove all risk, but maximize return on risk assumed to the benefit of shareholders

C. RM can reduce volatility of returns, reduces the risk of bankruptcy increasing the firm's value and its credit rating, and reduces required risk capital

D. Improved risk return trade-offs benefit shareholders

E. ERM ensures that

1. All risks are covered consistently in the way they are identified, reported and treated

2. Recognizes concentration and diversification effects leading to better overall risk management

3. Consistent application of the organization’s risk appetite

4. More accurate levels of capital are determined

F. ERM implies some centralization and that in turn

1. Aids in prioritization

2. Reduces costs – both transactional and through elimination of offsetting transactions in different areas and recognition of negatively correlated businesses

3. Improves consistency of response

G. Motivation for ERM is sometimes a previous failure, which is not optimal but better than nothing

1. Failure of other organizations or regulatory/auditor requirement can also be the motivator



H. ERM is used in many contexts:

1. When developing strategy for the company/department

2. When developing new products or projects

3. ERM is important for pricing insurance and banking products to avoid weak pricing cells and ensure adequate risk margins

III. 1.3 Enterprise risk management frameworks

A. Common features:

1. Assessment of the context. Assessment includes the internal and external environment of the organization and the interests of its stakeholders.

2. Consistent risk taxonomy (classification system)

3. Identification of risks – both quantifiable and not quantifiable

4. Determination of target levels of risk

5. Comparison of actual levels of risk to targets

6. Decision on how to handle risks beyond the targets

7. Implementation

B. Documentation of the risk management process to ensure the approaches used are effective, changes in risk levels or nature of risks are highlighted and new risks identified

C. Communication of risk management process to internal and external stakeholders

IV. 1.4 Corporate governance

A. Good standards of corporate governance are essential to successful ERM implementation

B. 1.4.1 Board constitution

1. Foundation for good corporate governance

2. Split the roles of chairman and chief executive – former runs the board, latter runs the company

3. Majority of directors should be non-executives – can better focus on shareholders’ interests

4. Majority should be independents – independents should make up the compensation, audit and appointment committees

5. Chief risk officer should be a board member (Manual author note: a little bias showing here)

C. 1.4.2 Board education and performance

1. Detailed industry knowledge is only needed by executive (employee) members of the board



2. Others need generic skills to hold executives accountable

3. Training, continuing education and performance appraisal of board members are essential

D. 1.4.3 Board compensation

1. Linked to individual performance of the director and performance of the company overall

a. Latter can be achieved through encouraging stock purchase by board members or including a stock price element in compensation

E. 1.4.4 Board transparency

1. Includes open sharing of information to the extent possible, including board minutes

V. 1.5 Models of risk management

A. The central risk function (CRF) will determine the extent to which risk is managed through its interaction with the organization

1. 1.5.1 The ‘three lines of defense’ model

a. Tier 1 – day-to-day management

b. Tier 2 – independent risk management by the CRF

c. Tier 3 – audit

2. 1.5.2 The ‘offense and defense’ model

a. Business units play offense and try to take as much risk as possible to maximize returns

b. CRF plays defense and reduces risk to minimize losses

c. This is suboptimal as it encourages business units to disregard risk

3. 1.5.3 The policy and policing model

a. CRF sets risk management policies and monitors business units’ compliance

b. Suboptimal as well because CRF is too hands-off

4. 1.5.4 The partnership model

a. The preferred solution, often implemented by embedding risk professionals in the SBUs

b. Not perfect, because embedded CRF folks may lose independence

VI. 1.6 The risk management time horizon

A. Situations develop over time, which makes the choice of a time horizon for risk measurement important



1. Not sufficient to only consider end of period outcomes – intervening events could produce insolvency for liquidity problems

2. Recovery time after a loss event – including regaining solvency or reinstating lost protection – should be considered

3. Time horizon must be interpreted correctly

a. Example: does a 99.5% probability of solvency over a one-year horizon mean being able to withstand anything up to a one in 200-year event?



Investment Ethics, Chapter 1 G-9


Investment Ethics, Chapter 1 Sarah Peck, 2011

Introduction: The Case for Investment Ethics

I. Learning Objectives

A. “After reading this chapter, students should be able to:

1. “Describe some of the significant scandals in the history of investments.

2. “Explain the history and basic function of financial regulatory agencies.

3. “Identify key SEC filings and forms.

4. “Discuss the features of the investment industry that create opportunities for unethical professionals.

5. “List and discuss the four fundamental principles of investment ethics.

6. “Recognize and understand the importance of developing an ethical consciousness.”

II. Introduction: The Investment Industry – A Legacy of Scandals and a Need for Ethics

A. Education in investment ethics

1. Chapter develops basic principles of investment ethics

2. Takes into account scandal history, industry structure, law and regulations

B. History of scandals as long as there has been a finance industry

1. 1792 Duer and the Six Percent Club

a. Club purchased shares to drive up prices, create other investor interest driving prices high, then club dumped shares

b. Decline in economy and over leverage caused scheme to “fall apart”

2. 2008 financial crisis

a. “Generally agreed” a bubble in housing prices, low interest rates, initially low default rate, subprime borrowing, overconfidence, heavy borrowing

b. 2007 default rates increase, value of MBS securities declines rapidly

c. Bear Sterns collapse partially due to overleverage

3. Bernard Madoff 2008

a. 10-year + Ponzi scheme, defrauded investors of over $65 billion

b. Investment advisory firm that provided client “consistent, high returns, and against all odds seemingly continued to do so for many years.”

G-10 Investment Ethics, Chapter 1


c. Declining markets in 2008, withdrawals were in excess of new funds

d. Madoff realizing scheme would be exposed, turned himself in to the authorities

4. Charles Ponzi 1920

a. Saw arbitrage opportunity, coupon costing one cent in Spain could be redeemed for six cent stamp in US

b. Promised investors 50% return in 45 days

c. Demand for the arbitrage outstripped supply

d. Ponzi paid older investors with new investors money, keeping good amount for himself

5. Sampling of Financial Scandals

a. Mike Milken – 1980s insider trading

b. Nick Leeson – 1995 rogue trader from Barings Bank

c. Enron – 2001 fraudulent accounting to inflate profit, hide debt, inflating the stock price

d. WorldCom – 2002 accounting fraud to inflate profit

e. Jerome Kerviel – 2007 rogue trader of Societe Generale

C. Ethical principles needed specific to investment industry

1. Scandals helped bring about the collapse of the financial markets in 2008

2. Many could have been avoided if appropriate questions had been asked about certain behaviors

3. Scandals do provide insight to help create ethical safeguards

4. Book a practical guide

D. Terms

1. Mortgage-backed securities – “securities created from a portfolio or pool of mortgages; investor receives income from the securities from the interest and principal repayments on the underlying mortgages.”

2. Ponzi scheme – “a fraudulent scheme whereby old investors’ returns are paid out of funds raised by new investors”. Also known as a “pyramid scheme”. Named after Charles Ponzi, a 1920’s originator of the fraud

3. Arbitrage – “involves taking advantage of different prices for the same commodity in different markets”

4. Moral hazard – “occurs when parties do not fully bear the cost of their risk-taking behavior. As a result, they take more risks than they would otherwise.”



III. A Brief Overview of the Investment Industry

A. Function of investment industry – provide funds/capital to institutions that need funds to support their institutions

1. Institutions get funds, Investors offered a return on investment

2. Buy stocks, bonds, etc.

B. Intermediaries

1. The investment industry

2. Earn fees and commissions for bringing investors and issuers together

3. Types

a. Investment banks – assist issuers in raising capital

b. Market exchanges – provide liquidity, ability for investors to trade quickly

c. Brokers, traders – assist investors in buying/selling securities

d. Analysts – assist in determining which securities to buy/sell

e. Portfolio managers – which securities to hold to meet portfolio risk/return objectives

f. Investment consultants – assist funds in hiring portfolio managers; determining asset allocation

g. Mutual and other funds – “provide other types of security and portfolio products to investors”

h. Financial planners – recommend investment products to meet tax and financial planning/retirement goals

i. Compliance officers – make sure rules and regulations are being followed

C. Figure 1.1

1. Shows Issuers, Intermediaries, and Investors

a. Investors should include insurance companies



2. Shows flow of funds:

a. Capital from investors to issuers

b. Returns from issuers to investors

c. Fees from both investors and issuers to intermediaries

D. Figure 1.2 A public pension fund example

1. Overview: fund takes taxpayer $, invests to earn a return, pays retiree benefits

2. The process

a. Investor side

i. Fund has a board of trustees to oversee funds

a) Trustees are appointed or elected

ii. Board hires investment consultant to help the board

a) Develop investment policy including asset allocation

b) Hire fund/investment managers

c) Calculate fund performance measures

d) Develop operational procedures

iii. Investment managers hire portfolio managers

iv. Portfolio managers pick specific securities to meet risk/return goals

v. Analysts research different companies/securities to help portfolio managers pick securities

vi. Traders execute buy/sell orders from portfolio managers

b. Issuer side

i. Investment bankers help issuers issue and place/sell stocks and bonds

c. Other specialists who help make investment transaction possible

i. “Actuaries, accountants, information technology specialists, lawyers, banks providing custodial services and administrators”

E. Complexity of the process

1. Much money changes hands, several times over many years from initial tax payment to date last retiree is paid last benefit

2. Complexity and volume of transactions help create ethical lapses



F. Terms

1. Issuers – “corporations or other entities that issue securities in exchange for capital”

2. Investors – “parties who seek to invest money or capital in order to earn a return”

3. Intermediaries – “firms or individuals who act to bring other parties (i.e. issuers and investors) together in an investment transaction”

IV. Securities Laws and Regulations

A. The Securities and Exchange Commission

1. Securities laws, Securities Exchange Acts of 1933 and 1934, a response to financial scandals and the 1929 stock market crash

a. Stock manipulation, insider trading and fraud

2. Abuses continued by investment advisors leading to the 1940 Act

a. Description of 1940 Act in Terms, below

b. Act specifies penalties for violations

c. Rule 10b-5 to close loophole on insider trading

3. Information disclosure

a. Key forms include

i. Form S-1 for registration of publicly issued securities

ii. Form 10-K, 10-Q for audited financial statements

iii. Form 8-K for material changes

iv. Forms 3, 4, 5 for disclosure of holding, changes in holdings of “insiders”, employees, directors

v. Forms 13 D, G, F for disclosure of holdings, changes in holdings for “outsiders”, institutional holders, money managers

vi. DEF 14A for proxy statement disclosing executive comp, background, board of directors, shareholder voting

4. Bernie Madoff

a. Never registered as an investment advisor, a red flag



B. Sarbanes-Oxley Act

1. Next significant legislation since the 1940 Act

2. Enacted after further financial scandals (Enron, WorldCom) and stock market decline

a. Telecom deregulation, dot.com boom lead to stock market increases, pressure to continue to post strong earnings, accounting fraud

b. SOX designed to address abuses

i. CEOs benefiting from high stock prices, stock options with high prices due to accounting fraud

ii. Board forgiveness of significant loans to executives

iii. Company payment for executives “extravagant lifestyles”

iv. Accounting firms giving good audits to companies for whom the auditing company did substantial consulting work, conflict with independent audit

3. Legislative considerations post 2008 financial crisis

a. Excessive use of leverage

b. Independence, or lack thereof, of credit rating agencies

c. Ponzi schemes

4. Legislation tends to come after wrong doing

5. Understand ethical principles to act ethically without needing a law

6. Mini Application 1.4 Key elements of SOX

a. Audit firms restricted from doing non-audit work for audit clients

b. Primary auditor rotation required

c. Auditor required to report discrepancies from GAAP

d. Top executives cannot have been on company audit committee for one year before employment

e. Audit committee members to be members of board of directors

f. CEO and CFO need to issue statement certifying financial statements

g. If financial statements require restatement, CEO, CFO to reimburse bonuses/incentives

h. Blackout periods for executives buying/selling company stock

i. Illegal for company to loan executive money or extend a line of credit



C. Terms

1. Securities Exchange Acts of 1933 and 1934 “established the Securities and Exchange Commission (SEC), new securities laws regulating markets, and filing disclosures including audited financial statements.”

2. Investor Advisors Act and the Investment Company Act of 1940

a. “firms or individual professionals who seek to be compensated for advising on investments and in aggregate manage $25 million or more are required to register with the SEC and provide information about the nature of their business, their business and education and criminal background, and financial statements of the sole proprietorship or firm;

b. “advisors and investment companies must follow rules regarding record keeping and custody of client accounts and funds, disclosure of fees and commissions, and advertising”

3. Rule 10b-5 “rule preventing the manipulation of markets either through deceitful trading or use of information (i.e. rumors or inside information)”

4. Information disclosure - “information that is disclosed to investors in various required filings by the” SEC

5. Sarbanes-Oxley Act of 2002 (SOX) this act, “the Public Company Accounting Reform and Investor Protection Act of 2002, was designed to enforce greater accountability for corporate executives for financial statements, more fully disclose compensation contracts and other payments made to executives, and eliminate conflicts of interest between accounting firms and the corporate that they audited.”

6. Public Company Accounting Oversight Board (PCAOB) “governmental body established by” SOX “to oversee and enforce new laws imposed on auditors.”

V. Investment Ethics Are Easier Said Than Done

A. Section Beginning

1. All participants in investments industry want to make money

a. “When does economic self-interest devolve into greed?”,

b. Exploitation, gouging, unfair advantage, market manipulation?

c. Whose responsibility is it for risky investments?

B. Investments Are Complicated

1. Payments made today for uncertain payments tomorrow, with fees taken out in between

2. Investments are difficult as they require understanding of “numbers, contractual details, economic incentives, financial theory and statistics”

3. Do investors know if their advisor is unethical or stealing part of the return?



C. Investments Are About Information

1. Accurate information provides better estimates of future cash flows

2. When do investors receive information or at all?

3. When is information advantage fair? When is it unfair?

D. Investments Are About Resources

1. Do issuers use security proceeds ethically?

VI. Ethics Basics

A. Ethics – “standards for determining right or wrong behavior towards others in a particular context”

1. “Ethics are not religion, morals, laws or what is considered acceptable behavior in society”

2. Morals – “are absolute rules of behavior of people toward others”

a. Unethical might not be immoral

3. Laws determine which specific behaviors are illegal

a. Unethical might not be illegal

B. Ethics is about how you treat others

1. Direct behavior and indirect impact of behavior

2. Moral standards

C. Tension between profit and taking advantage of others

VII. Four Fundamental Principles of Investment Ethics

A. Section Beginning

1. Ethical principles as obligations to others

B. Ethical Understanding

1. Principle 1: Ethical Understanding – “because investments are complicated, you have an obligation not to knowingly engage in an investment transaction that either you or others do not sufficiently understand. This includes the underlying source of returns or fees charged”

2. Others need to understand the investment

a. Not all investors have same level of investment knowledge/understanding/experience

b. Need to understand the investor’s investment goals to translate to appropriate risk/return goals

3. Unfair fees can be hidden, what is being paid for and how



4. You need to understand the investment

a. Have others seek other advice if you do not understand

b. Complicated CDO models appear not to have been understood in years leading up to the financial crisis, even by those rating the securities

C. Ethical Use of Information

1. Principle 2: Ethical Use of Information – “Because investments are information driven, you have an obligation to ensure that you and others have access to relevant information and that you and others do not misuse of distort information in the investment transaction”

2. Insider trading

a. Trading on “material” not publicly available or accessible information,

i. Public ally available does not mean free

3. Market manipulation

a. Participants attempt to convey false information via trading

i. 1792 Duer and Six Percent Club – buying to create impression of widespread interest to increase stock price

4. Relevant information depends on the nature of the security

a. Stock information would include earnings, growth, sales, industry conditions, etc.

D. Responsible Investing

1. Principle 3: Responsible Investing – “Because investments provide financial resources to other, you have an obligation to ensure that you do not knowingly make or recommend investments that support activities that harm others.”

2. Investments provide capital to a company, hoping to earn a return, but is return more important than the harm company’s product might cause to others?

3. “Unfair hiring practices, pollution, unsafe products”

E. Trust and Fairness

1. Principle 4: Trust and Fairness – “Because you are dealing with others’ money either directly or indirectly, you have an obligation not to abuse trust placed in you that all other have either explicitly or implicitly placed in you to treat them fairly.”

2. Fiduciary duty – “professionals are held to a higher standard of behavior and loyalty because of the confidence and trust their client places in them”

a. Covers all behavior, and violations of Principle 4 likely include violations of the other principles



VIII. Costs and Benefits of Being Unethical

A. Benefits if you don’t get caught

1. You can benefit

2. Reasons for unethical behavior

a. Greed – make more money

b. Ego – cover up poor performance

c. Arrogance – unwilling to admit to strategy, or similar, failure

B. Costs of unethical behavior

1. Guilty conscience

2. Being fired

3. Loss of reputation

4. Cost to company/industry

a. People less willing to invest, deprive economy of capital to grow

C. Personal responsibility is needed

1. Laws, professional code, ethics officers not always enough especially when facing new situations, innovation, highly technical products

D. AIG Financial Products and Credit Default Swaps

1. Credit default swap – “a security that provides for insurance against a bond default”, (CDS)



2. AIGFP large and profitable book of CDS

a. But not regulated as insurance

b. Collateral to support CDS not required as long as underlying securities did not decline in value

c. 2008 securities declined in value, along with value of company’s other securities, and company could not post collateral, threatening purchasers of CDS with losses

d. US government provided $85 billion to rescue company

e. Unclear if company was legally required to post collateral

f. Were company’s actions unethical?

i. “If greed compromised their ability to assess risk and their collateral needs to the detriment of others, then they acted unethically”

ii. Were they simply caught by unexpected market changes?

IX. Conclusion: Developing an Ethical Consciousness

A. Thought process before taking action

1. Trying to justify own actions? Maybe unethical

2. Exploiting loopholes or behaving unethically

3. Only unethical actions need to be hidden

B. Apply the four ethical principles

X. Financial Market Regulatory Agencies

A. Securities and Exchange Commission (SEC) - “protects investors and maintains integrity of financial markets”

B. Financial Industry Regulatory Authority (FINRA) – enforces “federal and state securities laws for broker members. A nonprofit formed by merger of National Association of Securities Dealers and the regulatory function of the New York Stock Exchange”

C. The Federal Reserve (The Fed) – the central banking system, establishes monetary policy, formed in 1913

D. Federal Deposit Insurance Corporation (FDIC) – “protects against the loss of deposits if an FDIC-insured bank or savings association fails”, created by Glass-Steagall Act 1933

E. Commodities Futures Trading Commission (CFTC) – protects the public against fraudulent use of futures contracts, created by Commodities Futures Trading Commission Act 1974

F. Office of the Controller of the Currency (OCC) – “charters, regulates, and supervises all national banks” created by National Currency Act 1863



G. Office of Thrift Supervision (OTS) – “supervises national thrift and savings associations and protects consumers” created by Financial Institutions Reform, Recovery, and Enforcement Act 1989

H. National Credit Union Agency (NCUA) – charters and supervises federal credit unions, created by 1934 Federal Credit Union Act

Investment Risk Management - ACTEX Learning

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