I want to offer up the following, which is a Book Excerpt (June 22, 2010, 12:51PM EST) that I caught on Bloomberg.com....
....I have been quoted extensively in this piece, and offer it to you with a loud “No Comment”.
Having said that, would love to see your comments and opinions
Book Excerpt: Chasing Goldman Sachs
In an edited excerpt from her new book, Suzanne McGee writes about the inherent tension between risk managers and bankers
http://www.businessweek.com/managing/content/jun2010/ca20100622_618974.htm
Wednesday, June 23, 2010
Saturday, June 5, 2010
Just wrapping up a trip to Hong Kong and Macao where I spoke at Citibank’s Asia-Pacific Banks Conference on “Managing Risk in the New World”. A wide spectrum of Asian banks was represented in this excellent conference hosted by Citi’s Global Transaction Services business.
My theme is loudly that of keep-it-simple and back-to-basics, and it is time we re-discovered a strong common sense approach to financial markets and risk. Fear and greed remain key drivers of most of our crises, although to quote a former SEC chief “to blame greed for the financial crisis is like blaming gravity for a plane crash” !
Models don’t kill markets, people do. Let’s definitely not blame rogue models for landing us where we are now. It is time to do more on stress-testing and concentrations-analysis, and to form a much better understanding of liquidity and correlations than we do now. And it is more than time to become humble, as a clan whether you are a trader or a lender, a rating agency or a regulator, an economist or a risk manager!
Speaking of stress-testing, there continues to be a huge clamor for more discussion on this market-wide. Nobody really has this right, and while everybody seems able to do a good power-point presentation on the subject, the brass tacks are really tough. I am speaking more about scenario analysis & stress-testing than ever before, at a wide range of forums. More on this later, and on VaR, Risk-Appetite, Capital, Liquidity...there is much to talk about, and a good crisis not to allow to be wasted
Meanwhile, I have persuaded my good friend Aditya Rana in Hong Kong (ex-Citi, Morgan Stanley, AIG Financial Products) to put his increasingly popular newsletter on this site. Watch for this. I promise you something really worth the read. Watch also for Vikram Malkani’s (Citi, Lighthouse) post coming up.
Talk to you again soon ….
My theme is loudly that of keep-it-simple and back-to-basics, and it is time we re-discovered a strong common sense approach to financial markets and risk. Fear and greed remain key drivers of most of our crises, although to quote a former SEC chief “to blame greed for the financial crisis is like blaming gravity for a plane crash” !
Models don’t kill markets, people do. Let’s definitely not blame rogue models for landing us where we are now. It is time to do more on stress-testing and concentrations-analysis, and to form a much better understanding of liquidity and correlations than we do now. And it is more than time to become humble, as a clan whether you are a trader or a lender, a rating agency or a regulator, an economist or a risk manager!
Speaking of stress-testing, there continues to be a huge clamor for more discussion on this market-wide. Nobody really has this right, and while everybody seems able to do a good power-point presentation on the subject, the brass tacks are really tough. I am speaking more about scenario analysis & stress-testing than ever before, at a wide range of forums. More on this later, and on VaR, Risk-Appetite, Capital, Liquidity...there is much to talk about, and a good crisis not to allow to be wasted
Meanwhile, I have persuaded my good friend Aditya Rana in Hong Kong (ex-Citi, Morgan Stanley, AIG Financial Products) to put his increasingly popular newsletter on this site. Watch for this. I promise you something really worth the read. Watch also for Vikram Malkani’s (Citi, Lighthouse) post coming up.
Talk to you again soon ….
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