In relation to my review of Dr Willi Brammertz's book, a friend draws my attention to last week's Newsletter of the Global Association of Risk Professionals (GARP), which had a stunning bit of news:

GARP has now moved to accepting that standard contract types need to be defined for credit derivatives. It also now accepts that higher capital charges need to be made if standards are not followed. You may recollect that these are two key proposals made in Dr Brammertz's book.

The new GARP view is a bit of a revolution for the organisation - even if, in light of the crisis, the change of heart is not wholly unexpected.

At present, the GARP proposal is limited to credit derivatives - but it should be applied to all financial contracts, as Dr Brammertz quite correctly argues in his book.

Professor Prabhu Guptara