Gustavo Ballvé on January 18th, 2012
Corporate Strategy, Food for thought, Home, Mental models, Portfolio Management, Risk management

It would be easy to dismiss anything coming from Citigroup, not exactly the bastion of sound risk management practices. And it does appear like Vikram Pandit’s main suggestion here is, at first glance, simplistic yet hard to implement. That said, this is a time where everyone’s agenda is being tested – the intention here is clearly to try to insert a “market” measure, not necessarily this one, on top of government-imposed ones. Anyway, moves in the right direction are welcome: “We could go a long way to regaining that trust by making the system more transparent, by clearing some of the obscurity that causes people to believe the system is a game rigged against their interests.”

However, on risk management issues, we tend to defer to Taleb (new talk posted inside – H/T Farnam St. Blog). Also inside are links to other recent posts on risk management culture.

The Taleb video:

Great bit from the video above: “People have this problem with risk management: they think it’s two separable items. You have this growth, and then you have the risk. They don’t understand that first, to get rich, you have to survive. People don’t understand this logical precedence of one over the other.”

Other recent Buysiders.com posts on Risk:

Risk management culture – Jan. 4th, 2012

“He was from Goldman Sachs” – Nov. 3rd, 2011

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