Thank you kindly, very happy to join the team!
I’m originally from Australia and I’ve been fortunate to gain international experience, including emerging & developed markets, in London, New York, Sydney, UAE & across Asia with leading banks including Goldman Sachs, Deutsche Bank, Credit Suisse, RBS & Westpac.
I’ve built over 20 years of industry experience in roles across Risk Management, Treasury, Global Markets, Institutional Banking & Finance covering all traditional asset classes, with a commercial lens and extensive experience of the systems, governance and risk frameworks required for the effective risk and economic management of Financial Institutions.
To be honest, it was the cracks & flaws in our legacy financial system that became more and more obvious from 2007 onwards, at least for me, I know many people were aware of the underlying issues for a long time.
Inflation being a key feature & challenge of our legacy financial system became clear to me when I was validating the Inflation Swap model for a large bank in the late ’90s. It was clear that official inflation measures are incomplete and detached from people’s real experiences. This became more obviously problematic with the Real Estate bubble which drove the 2008 global financial crisis.
I’m hopeful solutions may be developed in the digital asset ecosystem which will be more supportive of prosperity generally.
Firstly, I’m a big believer in infrastructure and its ability to deliver & underpin important economic development. Hex Trust with its institutional-grade safe custody solutions is providing key infrastructure to the digital asset / DeFi world, which will form part of the backbone of the industry to enable the broad adoption of digital asset & DeFi solutions. With my risk hat on, this is a solid choice.
Secondly, the group is building out HT Markets to provide balance sheet/financing solutions and Market Services to the industry and I see this as a major growth opportunity.
I’ve also been fortunate to have worked with Alessio previously and have met Rafal, Marty & others at Hex Trust over the years, so I’m confident in the quality and ambition of the management team.
Hex Trust has delivered institutional-grade custody solutions for the digital asset ecosystem and already has in place significant governance on the risk side, I’m here to help Risk Management & Control to scale and grow to support a rapidly growing organisation.
Structure is incredibly important and that means a clearly structured institutional-grade risk governance framework, from the Board down — Committee Charters, Policies, Risk Appetite Statement & Delegated Authorities, Model Risk & Methodology governance, Roles & Responsibilities through to operational procedures.
Different parts of the business have different risk profiles, from Operational Risk, Technology Risk, to Credit Risks, Market Risk & Liquidity Risk for the HT Markets business. In the digital asset / DeFi world the ‘financial products’ may ultimately be similar to traditional finance, however, you have a whole range of new risks to consider as well. For example, Staking Risks include price risks, asset liquidity risks, different rewards durations & payoff models, Validator performance risks, costs, slashing, loss of assets and more…
Plus, many new channels to consider e.g. many exchanges, DAO’s (Decentralised Autonomous Organisations) and exposure to the performance of a whole host of different DeFi protocols.
On top of this, it is all running 24/7/365, the market never closes, so we need to implement significant amounts of automation in our control infrastructure.
We need to put a ‘box’ around all these parameters, in addition to traditional risk parameters, to manage our appetite for exposure and ensure we only execute through channels & products which have gone through our internal process to be approved as part of our Risk Appetite Framework.
In terms of differences, there are a few more moving parts than traditional finance and you need to develop new solutions for how to manage/mitigate some of the new risks (outlined in the question above). However, the principles remain the same, Risk Management is about understanding risks, then actively managing to mitigate those risks in a prudent manner and enable the business to achieve its strategic objectives. A smoothly running risk governance framework can deliver a competitive advantage for the business to transact more efficiently than the competition.
As for similarities, there are many, primarily once you have your Risk Management Operating Model in place, it’s a lot about data to inform decisions. Price data from many exchanges, data from on-chain activity, data on DeFi protocol performance, monitoring various protocol governance triggers, searching for stress indicators… there’s already an enormous amount of data to consume, analyse and monitor in this space and it’s going to grow exponentially.
Effective communication within the team and organisation is of course always a given but arguably becomes even more important with more moving parts.
Well, it has certainly been an interesting journey, very educational! Much of my career has been driving the ‘run-the-bank’ side, as opposed to project teams, but to be honest, you are continually working on projects to improve processes around you.
Interesting activities include:
As a result of seeing the damage caused by asset price inflation in the first decade of this century, I wanted to make a contribution to the discussion on the drivers of wealth inequality.
So, I have a half-completed book sitting on the ‘shelf’ and I’m keeping my eye out in the digital asset & DeFi world for the final chapters. The working title is:
A Capital Mistake — The Real Story of Wealth Inequality & Time Poverty
The book aims to elevate the mechanics of the legacy Monetary System and traditional Banking & Finance to the discussion on Wealth Inequality. It explores how these systems have combined to create a perfect storm on Capitalism, sacrificing the aspirations of the young and living standards of the salaried and wage class on the altar of “Fool’s Capital”.
On top of this, I’m fortunate to have four amazing children and a wonderful wife. At weekends we often take the girls horse riding and for lockdown, we enjoyed the evenings with our Chessboard and a bottle of red!