Posts Tagged ‘ derivatives ’

Risk management oldies but goodies

October 12, 2011

The good folks at Riskviews got me thinking about my least read posts. I’ve been doing this for a few years and understand that no one wants to scroll through over 300 blog entries to find some gems from 2006. So here are a few items you may have missed that might be worth your time. A Common Sense Approach to ERM In a sentence, The Riskczar says the common sense approach to describing the process of risk management like this: First you identify your risks, you figure out which ones are the most important, next you decide how to…

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CEO Oswald Gruebel reacts to UBS fraud [humour]

September 17, 2011

Here is a reenactment of how UBS CEO Oswald Gruebel reacted when he learned about the $2 billion fraud. (That is Colin Firth portraying Gruebel on the left.) http://www.youtube.com/watch%3Fv%3DxJvGE7Vvd4M

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Risk management is neither the cause nor the solution to UBS’s problems

September 16, 2011

A headline today on CBC.ca reads “UBS case latest failure of risk management”. I think I will spend the rest of the day being offended by the CBC. (All will be forgiven if Amanda Lang appears on the National tonight.) Despite all the systems, oversight, controls, compliance, supervision and some other sixth thing, you can’t stop the rogue trader. Adoboli is to blame. His boss is to blame. Maybe culture or performance objectives are to blame. But risk management is not. Saying Risk Management is to blame is like saying the police department should be blamed for a teen committing…

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Bad day to be chief risk officer at UBS

September 15, 2011

Blessed are the risk managers: for they shall be called sons of God.                                                                                           -  Riskczar 5:9 One can only imagine the profanity and f-words that spewed from the mouth of Maureen Miskovic, the new Chief Risk Officer at UBS, when she learned about the $2 billion rogue trading hit at UBS. I bet she made Carol Bartz look like a Ned Flanders. It’s still too soon to know who knew what and when, but as Simon Morris explained in a Reuters article, the root cause is likely insufficient supervision: “No rogue trader works in a vacuum, and UBS’s management…

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The CRO cannot be expected to do what only the CEO can do

May 27, 2010

Here’s an excellent op-ed piece in US Banker about the role of the chief risk officer and the CEO. This may be the best thing I’ve read in months. Setting the tone for this article is Warren Buffet who recently wrote in the BRK shareholder’s letter:  “I believe that a CEO must not delegate risk control. It’s simply too important. … If Berkshire ever gets in trouble, it will be my fault. It will not be because of misjudgments made by a risk committee or chief risk officer.” The author writes: 1) CEO is directly responsible for thoroughly understanding and…

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