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3 Observations from the Workshop's Keynote Presentations
Pages 14-16

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From page 14...
... No one considers the latter event to have been systemic, even though it involved losses on the same scale as those of the current crisis. The difference is that people who invest in the stock market expect some downturns and were presumably aware of the risk prior to April 14, 2000.
From page 15...
... _________________ SOURCE: Adapted, with permission, from Andrew Lo, Massachusetts Institute of Technology, presentation at the Workshop on Technical Capabilities Necessary for Regulation of Systemic Financial Risk, Washington, D.C., November 3, 2009. Myron Scholes of Stanford University gave a keynote presentation that discussed the costs of adjusting portfolios when conditions change.
From page 16...
... Thus, long-term risk measures must reflect the way that risks are likely to change. Counterparty exposures are important systemic risks in the over-the-counter derivatives markets, and these can be managed by a combination of central clearing, collateral contracts, and improved transparency.

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