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Stanford's return on investment expectations are
realistic and always based on as much knowledge, information and comfort as
can be obtained on a firsthand basis, never secondhand. In many instances this is simply being willing to do the hard work necessary in order to make sound investment decisions.
Stanford employs an investment strategy with the goal of minimizing systematic and unsystematic risk, while maintaining more than adequate liquidity, portfolio efficiency, operational flexibility and absolute yields, as opposed to index-benchmarked yields.
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Stanford's investment teams control your risk level by keeping SIB's portfolios globally diversified across different economies and asset classes that are non-correlated. Stanford's investment strategy is determined by the Bank's Board of Directors annually and reviewed quarterly. Weekly investment committee meetings are conducted with each portfolio management team to ensure that the stated risk and reward parameters fall within the Board's guidelines.
These teams are comprised of seasoned investment managers located throughout the world, most of whom have worked with the Bank for the past 10 to 15 years and many of whom have been with the Bank since its inception in 1985. They understand very clearly Stanford's investment philosophy and return on investment expectations and have grown and evolved with Stanford over these past two decades.
The Bank utilizes alternative investments along with leverage when appropriate, always with a weighted risk factor toward current market conditions. Alternative investment vehicles include long/short equity, event-driven, fixed income and arbitrage strategies. Although used sparingly, Stanford's alternative investment strategy has played a very important role in managing risk by providing equilibrium during market volatility.
The Basel Committee in 1997 developed and issued a set of "Core Principles for Effective Banking Supervision," which provides a comprehensive blueprint for an effective supervisory system. This most recent accord, known as Basel II, provides a new capital adequacy framework. Guidelines issued as a result of this accord are scheduled to be fully implemented by 2007. They require that financial institutions follow an amended risk-based capital model, which now includes operational risk. The Financial Services Regulatory Commission in Antigua and Barbuda embraced the new model and issued guidelines in several areas in preparation for full implementation of Basel II by 2007.
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