Managing Risk is the Main Task Ahead
Friday, January 8, 2010 12:09
The main challenge for asset managers in the coming decade is understanding, managing and communicating risk.
This was the overwhelming message of a survey of senior industry figures carried out by FTfm. According to Wolfgang Mansfeld, president of the German trade association—BVI, The most important lesson of the past decade is about managing risk. Managing risk is not mainly a question of tools and techniques. Far more, it is a matter of risk culture and risk governance. Risk management, in other words, has to be a boardroom issue.
Many financial models failed in the past two years as markets demonstrated they didn’t behave according to conventional assumptions. Markets are not efficient, investors don’t have rational expectation, security prices don’t reflect all known information and the market is not always right.
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