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Risk Management is Back In an article on The National website, Dr. Mohamed A. Ramady, a finance and economics professor and former banker in Saudi Arabia says liquidity risk has become self-evident as central banks must hold the system together in the wake of government bailouts, hedge fund manipulation and the collapse of Lehman Brothers. But the new risk management must be simpler, accessible to people at many levels of an institution, and regularly addressed as an inherent part of business operations, Ramady writes. Particularly in the C-suite of institutions, he adds, “board directors, chairmen and chief executives have to accept that risk management is as important as earnings growth and insist that the rest of the organization shares that view.” Ramady adds that those who fail to do this voluntarily will be forced to by their regulators. He suggests banks examine questions such as: Why are we in these lines of business? What risks do we take? How do we evaluate counterparty risk? Is the risk taken commensurate with the levels of profit earned? “People at all levels of the organization need to be shown how to make decisions in a more disciplined, rigorous way,” he writes, “taking into account the relative likelihood of different outcomes and the extent to which those outcomes can be supported by the organization.” To read the full article, click here:
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