glynholton

Ask a practitioner of the origins of financial risk management, and he might say it emerged in response to financial blow-ups of the early 1990s. Or he might say it emerged out of efforts by the Basel Committee to standardize bank capital requirements globally. Or he might say it emerged from efforts by banks to understand their own risks�RAROC and RiskMetrics being the two most obvious initiatives. All these explanations would have financial risk management emerging during the period 1985-1995. But what exactly emerged? ... Sooner or later, every firm has a budding rogue trader. Only one in a thousand is ever reported in the newspaper. The vast majority are discovered before they can do much damage and are quietly let go. In organizations where risk management works well, bad apples are easy to spot. They are the one or two traders who are evasive in their dealings with risk management. But those bad apples won't stand out if there is a cold war raging between the front and middle offices. In a context where every trader is evasive towards risk management, the bad apples don't stand out. There are plenty of reasons to avoid conflict, but this one alone is sufficient. ... There are two fundamentally different approaches to financial risk management. ... help us understand what works and what doesn't work in financial risk management. ...

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Financial Risk Management (30 other websites)
...practitioner of the origins of Financial Risk Management, and he might say it...