Cross-Asset Risk Management: Integrating LLMs for Real-Time Monitoring of Equity, Fixed Income, and Currency Markets

Large language models (LLMs) have emerged as powerful tools in the field of finance, particularly for risk management across different asset classes. In this work, we introduce a Cross-Asset Risk Management framework that utilizes LLMs to facilitate real-time monitoring of equity, fixed income, and currency markets. This innovative approach enables dynamic risk assessment by aggregating diverse data sources, ultimately enhancing decision-making processes. Our model effectively synthesizes and analyzes market signals to identify potential risks and opportunities while providing a holistic view of asset classes. By employing advanced analytics, we leverage LLMs to interpret financial texts, news articles, and market reports, ensuring that risks are contextualized within broader market narratives. Extensive backtesting and real-time simulations validate the framework, showing increased accuracy in predicting market shifts compared to conventional methods. The focus on real-time data integration enhances responsiveness, allowing financial institutions to manage risks adeptly under varying market conditions and promoting financial stability through the advanced application of LLMs in risk analysis.

@article{yang2025_2504.04292,
  title={ Cross-Asset Risk Management: Integrating LLMs for Real-Time Monitoring of Equity, Fixed Income, and Currency Markets },
  author={ Jie Yang and Yiqiu Tang and Yongjie Li and Lihua Zhang and Haoran Zhang },
  journal={arXiv preprint arXiv:2504.04292},
  year={ 2025 }
}