Each time it was said, for goodness’ sake, this Italian is ruining Germany. There was this perverse Angst that things were turning bad, but the opposite has happened: inflation is low and uncertainty reduced. SPIEGEL: The economic crisis in Europe is still threatening to blow up the euro. Growth is low, so unemployment in southern Europe is reaching record levels.
The inability of VaR calculations to adequately measure the risks of certain traded positions may give rise to arbitrage opportunities between the banking book and the trading book because of the lower capital charge that may be afforded trading positions under a VaR approach that is not optimally risksensitive.