In his Presidential Address, Dr Hare talks about the theme for his presidency, ensuring that the profession is relevant in the current environment. He outlines some of the recent changes in the economic environment and the financial services industry. He then sets out each element of the profession’s strategy and discusses elements that he intends to champion during his Presidency to ensure that it remains relevant. He concludes by stating the profession’s vision.

This Working Paper should not be reported as representing the views of the IMF.

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

In today's financial system, complex financial institutions are connected through an opaque network of financial exposures. These connections contribute to financial deepening and greater savings allocation efficiency, but are also unstable channels of contagion. Basel III and Solvency II should improve the stability of these connections, but could have unintended consequences for cost of capital, funding patterns, interconnectedness, and risk migration.

This abstract relates to the following paper:

Al-DarwishA., HafemanM., ImpavidoG., KempM. and O'MalleyP.Possible unintended consequences of Basel III and Solvency II ‐ Abstract of the Edinburgh discussionBritish Actuarial Journal, doi:10.1017/S1357321713000391

Diversification across asset classes has declined markedly in the last decade and concerns abound about the ability (or lack) of the financial system to weather another 2008-like event. There is a growing volume of academic literature seeking to derive measurement variables for detecting systemic risk. There is clearly a role for the actuarial profession within this discussion and we hope that this paper can engender further discussions and papers on this specific issue.

Just as diversification across conventional asset classes has decreased there has been greater attention paid to the broader array of potential investment strategies that can be accessed via derivatives. The paper explores the prudent management of derivatives in pension funds and general asset portfolios to improve portfolio efficiency both in terms of implementing investment strategies and in broadening the range of investment opportunities for building an efficient investment portfolio from a risk-based perspective.