6 Ways Companies Mismanage Risk. Export

@article{3658994220090301, abstract = {Financial risk management is hard to get right even in the best of times. It can take one of six paths to failure, nearly all of them exemplified in the current crisis. Relying on historical data. A risk manager who assessed real estate risk on the basis of statistics from the past three decades would have been sorely unprepared for the volatility of house prices in 2007. Focusing on narrow measures. A daily Value-at-Risk (VaR) measure is commonly used for securities trading. But a daily measure assumes that assets can be sold quickly or hedged, so it doesn't apply to portfolios with which the firm may be temporarily stuck. Overlooking knowable risks. Risk managers often distinguish among market, credit, and operational risks, which they measure differently and in isolation rather than cross-organizationally. They may also fail to assess new risks embedded in the instruments they use for risk mitigation. Overlooking concealed risks. Risk takers may deliberately hide their risks, as ha}, author = {Stulz, Ren\'{e} M.}, citeulike-article-id = {5770113}, citeulike-linkout-0 = {http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=36589942&site=ehost-live}, journal = {Harvard Business Review}, keywords = {mgs}, number = {3}, posted-at = {2009-09-10 15:48:08}, priority = {0}, title = {6 Ways Companies Mismanage Risk.}, url = {http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=36589942&site=ehost-live}, volume = {87}, year = {2009} }

TY - JOUR ID - 3658994220090301 L3 - citeulike-article-id:5770113 N2 - Financial risk management is hard to get right even in the best of times. It can take one of six paths to failure, nearly all of them exemplified in the current crisis. Relying on historical data. A risk manager who assessed real estate risk on the basis of statistics from the past three decades would have been sorely unprepared for the volatility of house prices in 2007. Focusing on narrow measures. A daily Value-at-Risk (VaR) measure is commonly used for securities trading. But a daily measure assumes that assets can be sold quickly or hedged, so it doesn't apply to portfolios with which the firm may be temporarily stuck. Overlooking knowable risks. Risk managers often distinguish among market, credit, and operational risks, which they measure differently and in isolation rather than cross-organizationally. They may also fail to assess new risks embedded in the instruments they use for risk mitigation. Overlooking concealed risks. Risk takers may deliberately hide their risks, as ha IS - 3 JF - Harvard Business Review TI - 6 Ways Companies Mismanage Risk. VL - 87 KW - mgs AU - Stulz, René PY - 2009/// UR - http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=36589942&site=ehost-live ER -