Economic Crisis: Why ERM Did Not Fail

economic-crisisRisk management controls: not implemented — or rather, subverted

We are continuing to experience economic turmoil. After the first severe and generalized wave of economic upheaval originating in the US recession, many in risk management circles were speaking of “the failure of Enterprise Risk Management”. First, let’s not characterize what happened in those terms, because failure depends upon one’s point of view; the failure was not universal. The people responsible for what Galbraith called the “seemingly imaginative, currently lucrative, and eventually disastrous innovation in financial structures” did not fail.  (He was writing back at the time prior to the October 1987 crash, about parallels to 1929 — but might just as well have been referring to collateralized debt obligations – CDOs).
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Financial Risk Modeling

2011-09-12 / Social, Economic and Financial Risk / 1 Comments

financial-risk-modelingDo financial models support corporate values?
“My goal for the workshop is to understand: How do data modelers view the question of risks that cannot be readily quantified?  It would be helpful to discuss how financial and statistical modeling should be related to strategic planning. It would be helpful, too, to examine critically the role that assumptions and corporate values plays in doing modeling.”

Those were the goals I set for myself not only for the RIMS workshop back in March 2009: ” Risk Analysis Tools” in Miami, but also for the May 2010 session held in Toronto: “Finance for Risk Managers”. Read the rest of this entry »

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