Portfolio BCP: Applying Business Continuity Practices

Catastrophic events can lead to change in established practices. This paper argues that organizations may get a competitive advantage by applying practices used in Business Continuity Planning (BCP) to the management of institutional portfolios. We propose a framework to prepare for extreme market events and mitigate their impact. This paper describes the required elements of BCP as applied to portfolios, reviews the tools and processes necessary to monitor the level of stress in financial markets, and tests the effectiveness of a number of mitigating strategies.