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Public Policy Parameterization -- Pandemic Edition

Operating at the innovation frontier means that pioneers spend at least as much time on thought leadership as they do on scaling up a business. BCMstrategy, Inc. is no exception.

We transform the words of the public policy process into structured data (integers). Our Phase I product provides superior insight formation for readers and subject matter experts that seek to dig into the daily technical detail of policy formation. They connect the dots faster and see things that can be missed using traditional media and policy monitoring services. Phase I is exciting for everyone tired of reading endless email newsletters and conducting countless searches to see "what did I miss?"

But for the rest of August, we will be providing our readers with a sneak peek at what Phase II will entail.

We are not merely building the best policy monitoring insight platform. Our patented technology creates alternative data which can be used to measure public policy risks. That data will be used as curated training data for a range of purposes related to public policy analysis, not the least of which is policy trend projection.

The first step is scenario analysis.

Advocates use qualitative scenario analysis to conduct "war games" and plan their strategies. Our time series data already provides powerful tools to serve this need, even in Phase I. Risk managers use both qualitative and quantitative data to conduct scenario analysis in order to anticipate (and prevent) losses.

Earlier this summer, we held a very well-received webinar and ran a series of blogposts regarding scenario analysis, data, and artificial intelligence.

The short version: data gaps and the pandemic economy require careful curation for what kind of data is used in these models if the outputs are to be meaningful

because even though process automation, machine learning and artificial intelligence can provide powerful mechanisms for enhancing scenario analysis, there are no shortcuts.

When August vacations are over, many of the pandemic-era policies will have to be renewed, expanded, or eliminated. Every decision amplifies risk exposures. The challenge for risk managers at this stage is to identify where and how public policy risks are embedded into the quantitative risk measurement mechanisms used by capital markets and risk managers to estimate their risk.

Emergency measures taken during the pandemic (which we blogged about at the time), complicate considerably the risk measurement and risk management process. Traditional estimation methods based on historical data are of questionable utility when so many government guarantees, regulatory relaxations, and subsidies inhibit loss-generating actions by borrowers. Because these measures are temporary and directed to a uniquely exogenous event, they also embed an abnormally high amount of public policy risk into portfolios that ordinarily would be insulated from public policy risk.

Our PolicyScope Platform provides risk managers with advanced and effective tools to find, measure, and address public policy risks within their portfolios.

Next up tomorrow: Default Probabilities.


BCMstrategy, Inc. is an early stage technology company bringing the data revolution to policy intelligence by quantifying global public policy activity daily. Daily analysis of platform data is available to individual subscribers through the PolicyScope Risk Monitor. Subscribe today today to receive data-driven insights regarding key geoeconomic policy trends. Please contact us for more information regarding enterprise-level deployments for teams and direct data delivery via API.

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