Dear Subscriber,

Welcome to RiskNews Update - 25/1/2002

The focus of investigations into the collapse of Enron turned to its derivatives trading business this week. Expert testimony in a US Senate hearing Thursday by Frank Partnoy, a professor in the University of San Diego School of Law, warned that profits the firm attributed to its derivatives operations may have been inflated due to systematic problems with the way Enron valued its positions and recorded them in its trading book. But Partnoy - who is currently researching a book about Enron's fall - failed to provide any hard evidence. Enron spokesman Vance Meyer refused to address the matter, stating Enron would not offer counterarguments to each testimony. To vote on whether derivatives played a key role in Enron's demise, visit http://www.risknews.net.

Meanwhile, Citibank and Soci?t? G?n?rale will sell warrants for the first time in the North American retail market on Monday, via the Bourse de Montr?al. The expansion is significant for the banks, both of which are market leaders in the warrants business, as it could open the way to selling the products to the US retail market. A tight US regulatory environment currently impedes the selling of warrants in the US.

Operational risk software and data vendors Raft International and OpVantage plan to integrate their respective op risk applications, Raft Radar and OpVar. US-based OpVantage was established in April last year when PricewaterhouseCoopers and NetRisk merged their op risk offerings. The firms believe the joint offering should allow users to manage their entire operational risk process from developing and collecting risk indicators through to calculating capital-at-risk.

On the people front, Lehman Brothers lured a 15-person equity barrier options team from rival CSFB. The move is the largest hiring spree in Lehman's two-year drive to boost its equity derivatives capability. The team will be led by Jerry Guthrie. Deutsche Bank, meanwhile, hired Michel Iskander to head its OTC derivatives structuring business. Iskander, who has worked at JP Morgan since 1993, will manage a team of about 10 and report to Toshio Okumura.

Christopher Jeffery
Editor, RiskNews
http://www.risknews.net
mailto:cjeffery@riskwaters.com

>> The February issue of Risk will include the annual Commodity and Energy Rankings - Risk polls the largest energy and metals derivatives dealers, brokers and end-users to reveal the top firm in each of over 50 products. Find out who the leaders are by registering for your FREE copy of the February issue at http://www.risk.net

Visit http://www.risk.net/awards2002 for information on the Risk Awards 2002 Presentation Dinner, which will be held at the Regent Hotel Wall Street, New York on February 28. All proceeds from the dinner will be donated to the Risk Waters Group World Trade Center Appeal (see below for further details). To reserve your table, contact Brid Hayes at bhayes@riskwaters.com

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Headlines/Technology/People/Events

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Headlines - 25/1/2002
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25 January - The US Senate hearing on the collapse of Enron opened yesterday with expert testimony urging the focus of investigations to fall more on the firm's derivatives trading operations.

25 January - Citibank and Soci?t? G?n?rale are set to sell the first warrants to the North American retail market when they start trading them via the Bourse de Montr?al, Canada's financial derivatives exchange, on Monday.

25 January - Operational risk software and data vendors Raft International and OpVantage plan to integrate Raft Radar and OpVar, their respective op risk applications, in a collaboration that will see the global delivery of joint products and services to financial institutions.

25 January - I-Wex, a UK-based data provider, has launched QuantWeather.com, an online platform for historical weather data. Speaking at the product's launch, at Risk's WeatherRisk 2002 conference in New York, Nick Mooney, I-Wex's chief executive, claimed QuantWeather could help boost the use of weather derivatives by providing historical hourly weather data.

24 January - Platts, the energy information business and part of McGraw-Hill, has launched a series of coal derivatives indexes in the US to help market participants to price contracts in this developing area of the energy markets.

24 January - A joint venture between the World Bank and US energy company Aquila is set to broaden the growing weather derivatives sector into emerging markets for the first time.

23 January - The WeatherRisk 2002 conference in New York opened today in upbeat mood, with speakers predicting strong future growth in the market despite the pull out of two leading weather derivatives trading firms, Enron and BNP Paribas.

23 January - Central counterparty the London Clearing House (LCH) reported record volumes and notionals last year, seeing contracts cleared up by 40% to 315 million, worth a notional value of ?168.13 trillion.

22 January - The International Swaps and Derivatives Association and FpML.org, scheduled to merge at the end of January, have published a trial recommendation for financial products markup language (FpML) Version 2.0.

To read more now, click http://www.risknews.net

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Dealing with Technology (DWT) 2002 - the global trading and risk management forum
Thursday April 11, 2002
The Brewery, London

The challenge is clear. Get the most out of new technology and legacy systems. Ensure maximum return on investment. Make risk management your priority. Stay ahead of the competition.

At DWT 2002, a free one-day exhibition and series of vendor presentations, you'll find innovative trading technology and risk management vendors, plus revolutionary dealing room solutions that will help you stay ahead in this fast-moving market-place. You'll also find everything you need to know about the issues that matter, including real-time data integration, data aggregation, exchanges, trading portals and STP - all under one roof.

Want to attend this FREE event?
If you are responsible for: trading, treasury, operations, market data, risk management, internet or intranet, enterprise information architecture developments or e-finance then DWT 2002 is an event you cannot afford to miss.
Register now for this FREE event at: http://www.dwt-event.com

Want to exhibit?
For more information on exhibitor opportunities please contact Nick Hastings, via mailto:nickh@write-image.co.uk or by telephone: +44 (0) 20 7959 5484. Alternatively visit: http://www.dwt-event.com

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Technology and Exchanges - 25/1/2002
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24 January - Icor Brokerage, an over-the-counter electronic forex options trading platform, has seen a trade a day since it was finally launched in Asia on January 16 - more than a year after its initial schedule.

23 January - Omgeo, the global trade management services provider, said 17 firms had signed up to its global straight-through processing platform, Omgeo Central Trade Manager (CTM), a central matching product for domestic and cross-border trades.

22 January - SunGard Trading and Risk Systems, a unit of US financial services supplier SunGard, will offer users of SunGard Transaction Network (STN) Treasury - an online trading platform for forex and money markets - on-demand risk analysis and reporting through its Panorama KnowledgeFactory.

22 January - Euronext is launching six weather indexes for France, called 'NextWeather', as a first step to offering exchange-traded weather derivatives contracts in continental Europe next year.

21 January - Icor Brokerage has launched its online brokerage service for forex options in the Asia-Pacific region, where 14 banks are already hooked up to trade over the system. Six additional Asian banks are set to go live next month.

21 January - Patsystems, the London-based independent software vendor (ISV), will renegotiate a 'substantial' number of unprofitable contracts with clients in its latest strategic review.

21 January - The EBS Partnership today goes live with EBS Trader, its internet-delivered conversational direct-dealing system for spot and forwards foreign exchange, company officials told RiskNews' sister publication FX Week. The service will compete directly with Reuters Dealing 3000 Direct, part of the UK information provider's Dealing 3000 range.

To read more now, click http://www.risknews.net

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Did you know that you can register to receive copies of Waters magazine for FREE?

Waters reports on how technology is changing the financial industry - and what the industry needs to do to stay one step ahead of the competition. Each monthly issue delivers dedicated coverage of the most recent developments in financial technology and market data. Visit http://www.watersinfo.com/magazine/applynow for your free copies.

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People - 25/1/2002
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24 January - US investment bank Lehman Brothers has lured a 15-person equity barrier options team from rival Credit Suisse First Boston (CSFB) as part of its bid to boost its equity derivatives operations.

23 January - The nascent Professional Risk Managers' International Association (PRMIA), set up by a raft of disgruntled former Global Association of Risk Professionals' (Garp) ex-regional heads, has appointed an interim board.

23 January - Canadian risk software and systems provider Algorithmics has promoted Michael Zerbs, formerly vice-president of research and product marketing, to chief operating officer - a newly created position.

22 January - Deutsche Bank has hired Michel Iskander to head its over-the-counter derivatives structuring business. He will manage a team of about 10 people in the newly created position. He will report to Toshio Okumura, head of the structured products group, and be based in London.

22 January - Barclays Capital, the investment banking unit of the UK's Barclays, has hired Lorenzo Gonzalez Bosco from Bank of America to increase its derivatives origination, syndicated credits and bonds issuance in Mexico.

To read more now, click http://www.risknews.net
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Don't miss the February issue of Credit magazine - click
http://www.creditmag.com/freeissue to request your free sample copy.

This month we look at the prospects for ABS in 2002, assess e-bond trading and the various platforms and products that are on offer, and how these sit alongside traditional trading methods. Credit also lifts the lid on sell-side ratings advisory services and looks at current issues and trends in this important area of investment banking advice. Our country focus this month is the Nordic region where we examine the outlook for credit this year, profile corporate borrowers from the region and look at how the Scandinavian originated new issue market is taking shape in 2002.

******Be part of the only Credit Analysts survey that counts****
The 2002 Credit Analyst of the Year Awards - Polling begins 1st March
For further information contact Sean O' Callaghan on +44 (0)20 7484 9917,
e-mail mailto:socallaghan@riskwaters.com

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Events - 25/1/2002
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Take a look at the Risk Waters Group 2002 event calendar - it's now available online! Register for advanced 'Remind Me' alerts to be notified of specific event details, discount packages and other information at http://www.risk-conferences.com/events - If any of your colleagues or business associates would be interested in any of these events, please forward them this message.

*** LAST CHANCE TO BOOK FOR LONDON - EXCLUSIVE DISCOUNT FOR RISK NEWS READERS***
OpRisk 2002 - London, January 29-30, 2002 - New York February 22-23, 2002
Risk magazine's fourth annual operational risk conference.
The third consultative document for the Basel II capital Accord, due to be published this year, will provide a crucial opportunity for financial institutions to understand the growing convergence between quantitative and qualitative approaches to measuring and managing operational risk. OpRisk 2002 is the leading industry forum for operational and operations risk with the world's foremost experts including regulators, practitioners and academics detailing the approaches that can be utilised for efficient economic and regulatory capital allocation.
DISCOUNT - BOOK BETWEEN THE JANUARY 25-28, 2002 AND RECEIVE A 15% DISCOUNT. QUOTE CRXD101/ERN FOR EUROPE and CRXP87/ERN FOR USA
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DWT 2002 - London, 11th April 2002
The global trading and risk management forum.
www.dwt-event.com

***WEBSITE NOW FULLY FUNCTIONAL***
Risk 2002 Europe - Paris, April 23-24, 2002
Risk magazine's 7th annual European derivatives and risk management congress
http://www.risk-conferences.com/risk2002euro/?caller=rn

Energy and Power Risk Management 2002 - Houston, May 14-15, 2002 - Amsterdam, May 28-29, 2002
EPRM magazine's annual congress examining the latest developments in the energy markets
http://www.eprm-conferences.com/eprm2002/?caller=rn

Risk 2002 USA - Boston, June 11-12, 2002
Risk magazine's 8th annual US derivatives and risk management congress
http://www.risk-conferences.com/risk2002usa/?caller=rn

Other useful links:
~ About Risk & EPRM Conferences: http://www.risk-conferences.com/about.htm
~ Event Calendar: http://www.risk-conferences.com/events.htm
~ Event Marketing Information: http://www.risk-conferences.com/marketing.htm
~ Past Event Documentation: http://www.risk-conferences.com/order.htm
~ Risk Special Reports: http://www.risk.net/supplements/supplements.html
~ EPRM Special Reports: http://www.eprm.com/

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SAMPLE OFFERS
Claim your FREE sample copies of Risk Waters Group magazines and newsletters by clicking below. If your colleagues or business associates would be interested in any of these titles, please forward them a copy of this message. Thanks!

Risk - the world's leading financial risk management magazine
http://www.risk.net/sample/index.htm

Credit - the only magazine dedicated to coverage of the international credit markets
http://www.creditmag.com/freeissue

Energy & Power Risk Management - the leading risk management guide for the global energy markets
http://www.eprm.com/

Waters - focused coverage of financial market data and information technology
http://www.watersonline.com

Telecoms Capacity - essential reporting on risk, trading & technology for the telecoms industry:
http://www.telecomscapacity.com/index2.htm

M-finance newsletter - an indispensable guide to wireless applications in financial services: http://www.watersinfo.com/news/mf/forms/freeTrial.htm

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The Risk Waters World Trade Center Appeal - http://www.riskwaters.com/wtcappeal

This Appeal has been set up for the immediate families of, and any persons financially dependent on, those attending the Risk Waters financial technology conference on the 106th floor of the north tower of the World Trade Center on September 11, 2001, who lost their lives in the terrorist attack. Those attending the conference included many delegates, speakers, sponsors and exhibitors, as well as 16 people working for Risk Waters (UK, EU and US individuals).
The initial trustees of the Appeal Fund will be Peter Field (chairman & chief executive, Risk Waters Group Ltd), Dennis Waters (chairman & chief executive officer, GenomeWeb LLC, and director, Risk Waters Group Ltd) and Andrew Farley (solicitor, Boodle Hatfield, London). Risk Waters Group Ltd will be able to appoint new or additional trustees.
The trustees of the Fund will have discretion over how and to what extent to benefit individual claimants and their decisions will be final. As long as the trustees act honestly and in good faith they will not be legally liable for the exercise of their discretion nor for any loss that may occur to the funds raised, howsoever caused. The Fund will not itself be a charity, but any surplus will be applied for such charitable purposes as the trustees think most appropriate to commemorate those who died.

If you would like to donate to the Fund or find out more information please visit the Risk Waters World Trade Center Appeal website on http://www.riskwaters.com/wtcappeal

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