ABSTRACT
Many people blame the global financial crisis on a failure of risk management. They say that risk professionals should have been in the best position to foresee what was coming and warn the rest of us. If the forward-looking radar of risk management was unable to spot the danger signs, then it can be of little use in future. Perhaps we should rely on something else to make sure that we don’t make a similar mistake again.
Risk specialists tell a different story. They claim that they did indeed recognise the warning signs of overexposure in the financial markets and they raised these concerns within their organisations, but they were overruled by the business lines. It seems as if risk practitioners told their colleagues about the dangers and the decision was made to go ahead and take the risk anyway.
