MKM Research Documents
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PRS Platform Demo
Research Documents
Platform Demo (Feb-2026) - Description: This video (20 minutes) represents a milestone in physical risk quantitative finance — the demonstration of the first ever Physical Risk Swap (PRS) valuation tool built to satisfy banking Pillar 1 capital standards.
Infographic (16-Sep-2026): This visual is a tool to help people understand the scope of Physical Risk domains relevant to risk management in the Global Financial System. It explains how broad, deep and interconnected are the diverse range of physical risks that can impact the Credit Risk of a borrower.
Research White Paper (updated 20-Aug-2026): Abstract: This paper outlines an institutional pathway for Physical Risk Swaps (PRS) to become a major line of business within Credit Trading under the FICC division of the capital markets businesses of the leading global banking groups. It considers which major players in the CDS market are positioned to be the leaders in a Working Group for the creation of the PRS Market and detailed information on how to execute the new PRS Market.
White Paper (29-Jul-2026) - Abstract: This paper posits that the next phase of commercial space development requires a new capital markets solution that treats physical risk as a distinct, investable asset class. Drawing on established principles from structured finance, insurance-linked securities and credit derivatives, it introduces two complementary instruments developed by MKM Research: Physical Risk Obligations (PRO) and Physical Risk Swaps (PRS).
Infographic (08-Jun-2026) - This visual explains the missing link between insurance and banking that MKM has solved to translate physical risk loss distribution models to credit risk in basis points.
Research Catalogue (01-Apr-2026) - Abstract: This document summarises the open research publications and solutions development produced between 2023 and 2026 by MKM Research Labs for the quantification and comprehensive integration of Physical Risk into the financial services ecosystem. The document combines conceptual frameworks, financial modelling, derivative design, market architecture, and governance frameworks necessary for the successful integration of weather-induced physical risks into the global financial ecosystem.
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White Paper (05-Jan-2026) - Abstract: This paper explains the problem of lack of sufficient alignment of physical risk vendors’ models with banking model governance standards - a permanent blocker to bank adoption and regulator endorsement for use in Pillar 1 capital calculations.
Without such alignment through transparency, and given that banks cannot outsource accountability, it argues that it is almost impossible to determine whether vendor outputs are appropriate for capital processes under Basel rules.
White Paper (data) - Abstract: On 03-Dec-2025, the UK’s PRA published its latest guidance update on climate related risks titled SS4/25 – Enhancing banks’ and insurers’ approaches to managing climate-related risks. This document provides an assessment of that guidance by MKM. While the guidance is for regulated banks in the national UK market, MKM notes that the UK often has a meaningful impact on the global banking market given the substantial presence of material-sized subsidiaries of many international and other national banks, notably US banks.
White Paper (30-Sep-2025) - Abstract: In this paper we estimate that potential RWA reduction under Pillar 1 using may be in clips of the order of 100bps+ if banks adopt active hedging and synthetic risk transfer of Physical Risk. In the case of JPMorgan Chase, 100bps represents over $19bn of RWA which is 10x larger than our lower estimate of the potential RWA reduction under ICAAP in Pillar 2 of 10bps.