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RiskMetrics Labs

In pursuing our mission to be The Center for the Financial Community, RiskMetrics Group promotes greater transparency in the global marketplace and finds solutions to complex financial problems which have significant potential benefits for broad aspects of society and the world's financial community. Ultimately, we make risk more transparent, thereby increasing confidence in financial decision-making for all market participants.

We pursue these goals in two parallel ways: 1) by offering a compelling set of commercial businesses which serve the diverse needs of financial institutions and, 2) by creating a platform organization, RiskMetrics Labs, which sponsors programs and initiatives designed to generate value for the industry as a whole.

There are many problems too large to be solved by one organization, but which can be addressed through shared input from the thousands of the top financial organizations, academics, regulators and practitioners that comprise the Financial Community. RiskMetrics Labs harnesses the collective power of these pooled resources to bring a fresh perspective to the financial marketplace.

Innovation
Innovation is at the core of RiskMetrics' culture and will continue to drive the value we bring to clients. RiskMetrics Labs has been established as an experimentation unit focused on initiatives and programs that ultimately help all investors by connecting financial market participants to work toward the common goal of solving complex financial problems. Examples of the initiatives being pursued by RiskMetrics Labs include:

User Contributed Database of Security Prices
This project will create the world's first open source database of security prices. Users get free access to security prices by contributing prices of their own portfolio of securities. Various averaging methods can be selected by the user to ensure that outliers are only included if desired.
Global Securities Taxonomy (Periodic Table of Financial Elements)
A database of all listed and OTC securities is created and cross referenced by common risk factors and investor type. Benefits include improvements in stress testing capabilities with a potentially quantitative approach to contagion as well as improved funds flow analysis.
Community Stress Testing
A platform where users create and run stress tests to see the impact on major market portfolios. Users can see and contribute to one another's configurations, which will allow shared insight into market stresses on a real time basis.
Behavioral Trading Model
A Monte Carlo-style experiment where order flow is sent to a simulated trading pit and market behavior is modeled. Benefits include improved understanding of seemingly random price action as well as potential liquidity risk data.