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Chris Mushell and the PRMIA "Frontiers in Operational Risk Management" symposium.
On September 28, 2007 the New York chapter of PRMIA is hosting a symposium titled, “Frontiers in Operational Risk Management.”There are a number of interesting panels and a number of heavy hitters on the panels.I won’t be going and I regret that.One of the panels is moderated by Chris Mushell, Global Head of Operational Risk for Bear Stearns.The panel is titled, “You’ve calculated capital, now what do you do with it?”Of all the questions Mr. Mushell might answer, that is certainly the least interesting.
Assuming that Bear Stearns defines operational risk the same way most people in the industry do, Mr. Mushell probably bears little responsibility for Bear Stearns’s hedge fund meltdowns.Certainly, the base problem was one of credit risk, not operational risk.On the other hand, we are investors, not jurors, and we do not have to presume him innocent.It happened on his watch, after all.More important, many of the issues are clearly, in part, operational issues.For example, a number of economists, including New York Times columnist Paul Krugman saw this debacle coming.Were their arguments considered?If not, why not?If they were, what went wrong with the decision making process?
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"If your mother says she loves you, check it out." --Old reporters' motto; also our motto. Copyright (C) 2005, 2006, 2007, 2008, 2009 Fred Gehm. All rights reserved.