GARP Risk Index Hits Lowest Point Since Inception - Indicates Optimism About Global Market Conditions

By The Global Association Of Risk Professionals garp, PRNE
Wednesday, June 8, 2011

NEW YORK and LONDON, June 9, 2011 -

According to the latest quarterly Risk Index released today by the Global
Association of Risk Professionals (GARP,, seven of the
eight systemic risk factors tracked by GARP's Risk Index show a consistent
decline or flattening in risk perceptions, indicating growing optimism
amongst global risk managers. Overall perception of the riskiness of the
economy was down slightly at 107.81 compared to Q4 2010 and at an all time
low since the inception of the Index in Q1 2010. Notably, nearly 15% of
respondents migrated from high to lower risk attribution for all eight market

The assessment of risk stemming from commodities pricing, however,
continues to increase, up 8.5% over Q4 2010, and up 22% over Q1 2010. "The
rise in risk perceptions tied to commodities continues to be the most
interesting trend in the survey," said Chris Donohue, Managing Director, GARP
Research Center. "Risk managers are saying that inflation, resulting from
higher commodities prices, is the single biggest threat to systemic risk in
the U.S." In particular, anxiety around energy commodities increased
significantly in Q1 with more than 80% of risk managers ranking them as the
higher risk categories.

Despite an overall trend in growing optimism from risk managers, there
are still many structural imbalances in the U.S. economy and abroad that
could significantly impact market risk factors. Sovereign debt worries
remain a leading cause of concern among risk managers, particularly with
respect to Europe; 63% of respondents were highly concerned about the
possibility of a European debt crisis creating a systemic risk event in the
U.S. Within the nine macro-economic indicators tracked, there were two
noteworthy negative developments; risk managers report a 7% increase in
significant concern about inflation, and a 19% increase in respondents were
concerned that falling U.S. home values could strongly influence systemic

"The 19% increase in risk managers significantly concerned about falling
U.S. home values is one of the largest quarterly swings we've ever seen in
our risk factors," said Michael Sell, Program Manager of the GARP Risk

The GARP Risk Index monitors current global perceptions of eight
individual risk factors capable of triggering a systemic risk crisis in the
U.S. GARP researchers field the study quarterly, and tap global risk
managers who hold the Certified Financial Risk Manager (FRM(R)) and Certified
Energy Risk Professional (ERP(R)) professional designations.

MEDIA ONLY: to obtain a copy of the 2011 Q1 Risk Index report
and underlying data, please contact Kathleen Alcorn at

About The Global Association of Risk Professionals

The Global Association of Risk Professionals (GARP) is a not-for-profit
membership organization dedicated to preparing professionals and
organizations to make better-informed risk decisions. GARP's membership
represents more than 150,000 risk management practitioners and researchers at
academic institutions, banks, corporations, government agencies, and
investment management firms in 195 countries. GARP administers the Financial
Risk Manager (FRM(R)) and Energy Risk Professional (ERP(R))
exams-certifications recognized by risk professionals worldwide. GARP is
committed to advancing the role of risk management via education for
professionals at all levels of expertise. Visit

    Kathleen Alcorn
    Global Association of Risk Professionals (GARP)


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