Chartis Research Report Ranks Kamakura Risk Manager (Fiserv KRM) Number 1 in the World
Kamakura Blog: Observations on the Monoline Meltdown
A Happiness Survey of Risk Managers
Basic Building Blocks of Yield Curve Smoothing, Part 12: Smoothing with Bond Prices as Inputs
An Appreciation: Sebastián Piñera, President-Elect of Chile
Our “I told you so” blog of May 27 relates some real life tales of senior managers from the CEO to the Chief Risk Officer making reckless decisions about the businesses they are running. At the same time, bank directors have traditionally had limited banking experience and shareholders are taking them to task, as lead director O. Temple Sloan’s resignation from the Bank of America board today shows. This post raises the question, “Should the chief risk officer report to the Board or the CEO? Or is that too little, too late?” Read More »
Our “I told you so” blog of May 27 relates some real life tales of senior managers from the CEO to the Chief Risk Officer making reckless decisions about the businesses they are running. At the same time, bank directors have traditionally had limited banking experience and shareholders are taking them to task, as lead director O. Temple Sloan’s resignation from the Bank of America board today shows. This post raises the question, “Should the chief risk officer report to the Board or the CEO? Or is that too little, too late?”
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Our recent posts using public information to analyze what happened at Countrywide and Washington Mutual have prompted a heart-rending outpouring from risk managers at many institutions. This post outlines what we heard. Clearly, Carrie Underwood’s number 1 country song “I told you so,” a Randy Travis classic, could have been sung with justification by risk managers across the financial services industry. Read More »
Our recent posts using public information to analyze what happened at Countrywide and Washington Mutual have prompted a heart-rending outpouring from risk managers at many institutions. This post outlines what we heard. Clearly, Carrie Underwood’s number 1 country song “I told you so,” a Randy Travis classic, could have been sung with justification by risk managers across the financial services industry.
One of the most frequently asked questions when people review predictive models of default is this: “Aren’t those explanatory variables correlated, and doesn’t this create problems with multi-collinearity?” Since almost every default model has correlated explanatory variables, this is a question that comes up often. Since I am not an econometrician (although many of my colleagues are), this post collects quotes on this issue from nine popular econometrics texts (it was a 3 day weekend in the USA) to answer this question. Read More »
One of the most frequently asked questions when people review predictive models of default is this: “Aren’t those explanatory variables correlated, and doesn’t this create problems with multi-collinearity?” Since almost every default model has correlated explanatory variables, this is a question that comes up often. Since I am not an econometrician (although many of my colleagues are), this post collects quotes on this issue from nine popular econometrics texts (it was a 3 day weekend in the USA) to answer this question.
Z-man, senior Regional Banker, pointed out this quote from Donald Sull, faculty director of executive education at the London Business School, "My own sense is that we’ve got a lot of heroes of the last war still running around," he says. "[A bank] CEO is always a hard job, [but] it’s a much easier job when you’ve got a lot of tailwind. I think a lot of the current CEOs confused tailwind for horsepower." Institutional Investor, April 9, 2009. Read More »
Z-man, senior Regional Banker, pointed out this quote from Donald Sull, faculty director of executive education at the London Business School, "My own sense is that we’ve got a lot of heroes of the last war still running around," he says. "[A bank] CEO is always a hard job, [but] it’s a much easier job when you’ve got a lot of tailwind. I think a lot of the current CEOs confused tailwind for horsepower." Institutional Investor, April 9, 2009.
On May 8 and May 11, 2009, we posted some risk management strategies for individual investors with a different slant than Suze Orman might have taken. O-man, a New York risk management expert, responded with this heart rending e-mail: “My grandparents sold their house in suburbia in 1965 (they were 65 and 62 years old) and moved to an apartment. Then inflation happened. My grandfather died in 1975. My grandmother died penniless in 1996. If they had kept the house even 5 more years and captured some of that inflation premium, my grandmother would have been more comfortable in her final years. So, I agree with much of your analysis. The loose inflation hedge of owning your own home is a consideration, too.” How does inflation factor in to individual risk management strategies for individuals? This post explains. Read More »
On May 8 and May 11, 2009, we posted some risk management strategies for individual investors with a different slant than Suze Orman might have taken. O-man, a New York risk management expert, responded with this heart rending e-mail: “My grandparents sold their house in suburbia in 1965 (they were 65 and 62 years old) and moved to an apartment. Then inflation happened. My grandfather died in 1975. My grandmother died penniless in 1996. If they had kept the house even 5 more years and captured some of that inflation premium, my grandmother would have been more comfortable in her final years. So, I agree with much of your analysis. The loose inflation hedge of owning your own home is a consideration, too.” How does inflation factor in to individual risk management strategies for individuals? This post explains.
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