Risk Management

Comment by JJ Hornblass on September 9, 2008 at 11:08pm

Some risk management-related news from WaMu today. Here is my post.

Comment by Michael Gibb on October 1, 2008 at 9:42am

Standard & Poor's today unveiled a commercial paper index that will provide a benchmark for investors and the industry. More details are here.

Comment by JJ Hornblass on October 2, 2008 at 10:35am

A good article on why modern risk management has failed.

Comment by JJ Hornblass on October 28, 2008 at 5:05pm

FROM THE FDIC: The FBI, the U.S. Postal Inspection Service, and state and local authorities are investigating more than 30 threatening letters that have been received by financial institutions in California, Colorado, Georgia, Illinois, New Jersey, New York, Ohio, Oklahoma, Texas, and Washington, D.C. Most of these letters contain a powder substance with a threatening communication. At this point, field and laboratory tests on the powder have been negative. Financial institutions that receive one of these letters at any location (e.g., corporate office, branch office, etc.) should contact their local FBI office and ask for the WMD Coordinator.

Comment by JJ Hornblass on November 5, 2008 at 8:38am

The New York Times offers its analysis of the flaws in risk management in this article today

Comment by JJ Hornblass on December 24, 2008 at 4:03pm

Interesting commentary on when the economy might turn around. Hat tip to Dave Ruggles for this.

Comment by Rebecca B. Walzak on September 16, 2009 at 10:19am

Reading the article on the flaws in Risk Managment reminded me of the saying "Closing the barn door after the cows get out." There are numerous theories about what went wrong with the models so I'll add my own. it goes like this, we failed to include all risks in the models. Why, because the risk management professionals that develped these models were (1) arrogant about what made a difference, to the point that they refused to believe they were wrong about anything and (2) they were so young that having never lived through a downturn they disregarded the fact that one could occur and (3) greed.

As an student of process risk it was evident to me that the process, or lack thereof, for how products were originated made an equal contribution to the collapse of the market. If the underlying products in a security are made on inaccurate information, poor credit policy and even worse due diligence, they will fail. Yet while we continue today to talk about how to prevent it in the future, there is NOTHING being done to measure the risk created by this process failure. Only when we address the "smaller" issues will we have any chance to address the more complex issues discussed in this article.

Comment by JJ Hornblass on September 16, 2009 at 11:15am

You may great points, Becky. To build on your comments, see the following House testimony on financial modeling: StatementbyChristopherWhalen_HCST_091009.pdf

Comment by Rebecca B. Walzak on September 16, 2009 at 1:00pm

Thanks JJ. I agree entirely with theses statements. Is there some way I can connect with these folks to have an intectual discussion on how my small ideas can fit into their larger framework?

Comment by JJ Hornblass on September 16, 2009 at 1:22pm

Chris is a member of BankInnovation.net. His page is here.

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