Our need to focus on ourselves kills us in bank risk management too

Risk managers in banks have the same need for self focus as students.  They want social currency.

A bank will buy the wrong financial derivative from Goldman Sachs because Goldman Sachs has the right social currency.  Thus setting up the institution for failure in a crisis.

All the risk management employee at the bank customer of GS wants is the GS social currency, so the wrong hedge is purchased.


About New Math Done Right

Author of Pre-Algebra New Math Done Right Peano Axioms. A below college level self study book on the Peano Axioms and proofs of the associative and commutative laws of addition. President of Mathematical Finance Company. Provides economic scenario generators to financial institutions.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s