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

Jun 09, 2011, 07:57 ET from The Global Association of Risk Professionals (GARP)

NEW YORK and LONDON, June 9, 2011 /PRNewswire/ -- 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 factors.

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 risk..  

"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 Index.

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®) and Certified Energy Risk Professional (ERP®) 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®) and Energy Risk Professional (ERP®) 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)

SOURCE The Global Association of Risk Professionals (GARP)