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.

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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.
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