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Hack Wilson was an MLB star in the 1920’s, but he had a drinking problem. Realizing his potential, Hack’s manager pulled him into the dugout and said, “If I drop a worm into a glass of water, it swims around fine. If I drop it into a glass of whiskey, it immediately dies. What does this prove?”

Hack responded, “If you drink whiskey, you’ll never get worms.”

Hack’s observation, while misguided, provides a lesson in the difficulty of training and educating employees. Over the next several weeks, I h

There is growing recognition that the dispersion of credit risk by banks to a broader and more diverse group of investors, rather than warehousing such risk on their balance sheets, has helped make the banking and overall financial system more resilient.

The improved resilience may be seen in fewer bank failures and more consistent credit provision. Consequently the commercial banks may be less vulnerable today to credit or economic shocks.  IMF Global Financial Stability Report in April 2006. Re

Currently, the most a British senior can claim in state pension is £113.10 per week, which equates to roughly £452.40 per month. If you're accustomed to living off the income of a full time job, dropping to a state pension can be a real shock to the system. Unfortunately, that's the price we pay for more freedom and a few extra lay ins here and there. Of course, if we've built up a private pension over the years, this can supplement the state pension nicely, but it can still be quite nerve wrack

Where are there more homicides? Detroit or Michigan?

Most people would say Detroit, even though every murder in Detroit also takes place in Michigan. Our initial impressions, even those we have the utmost confidence in, can quickly and easily lead us astray. Avoiding such misconceptions is the value that risk assessments provide ERM programs.

Many risk managers we hear from rightfully criticize risk assessments designed around impact and likelihood to be too subjective, high level, and “fluffy”

The failure to foresee the timing, extent and severity of the crisis and to head it off, while it had many causes, was principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole. The British Academy on the causes of the Credit Crunch. Read more in the Risk-Based Performance Management book #RBPM

Banks continue to increase their social media presence, especially on Twitter. But for all the talk of 24/7 omnichannel experiences, the number of institutions offering a genuine round the clock, real-time Twitter service to customers remains small. For today’s social-media savvy customer, that simply isn’t good enough.

But things are changing. Nationwide, the UK-based building society, has become the first in the UK market to offer 24/7 Twitter support through ‘@AskNationwide’. This leaves other

Please take part in our latest research project related to the integration of strategy and risk management.

Take the survey at http://fluidsurveys.com/s/integrated-strategy-and-risk-research/

To future economic historians, the Credit Crunch might be the defining moment that separates the industrial age from the networked, digitized (or whatever name they assign to it) era we moved into in the early part of the 21st century. The Risk-Based Performance Management book. #RBPM

Many business cases for Enterprise Risk Management programs begin with what senior management can expect in terms of return on investment (ROI). While ROI may not be the best indicator of ERM success (it’s tough to quantify the monetary value of risks you’ve mitigated), there are simple and direct steps you can take to demonstrate the efficiency your program will gain through the implementation of an ERM system.

On average, risk managers spend 62% of their time on tactical, rather than strategic,

The way that we calculate capital requirements is one of those embedded assumptions that has existed for so long that we fail to think about whether it really makes any sense or not.  And if you do stop and take a step back, you will realize that it actually does not necessarily make much sense. 

We calculate capital requirements looking backwards, when the thing that we will need capital for is in the future.  That backwards capital requirement is only broadly close to being correct for firms th

Lack of transparency makes risk, performance and compliance information hard to discover, collect and maintain. Within every organization, governance areas are conducting activities, each based on different assumptions with different standards, all of which contain a risk component.

While these are typically not thought of as risk activities, when the responsibilities of each governance area are compared to a risk based process – identifying & assessing, mitigating, and monitoring – you find that

It is intriguing to see how often individual branches or geographic divisions in a bank have the tendency to re-invent the wheel. 

Why would a bank choose different organizational structures and processes in branches or locations? Why should a credit card application, for example, take 60 minutes in one country and just a few minutes in another? Or why are customer payment orders restricted to electronic channels only in some regions while others use a range of channels?

On the one hand, Lean and

Governance functions are designed to manage risks that organizations face in operational and back office silos - financial misstatements, fraud, vendor management, disaster recovery, and other activities are all designed to address a subset of an organization’s risk profile. The concept of Enterprise Risk Management is not to create another function that exists in parallel to these areas, but rather creates a standardized methodology and language to objectively prioritize across functions and le

I came across a great presentation on Reputation Risk from Martin Davies of Causal Capital. It outlined the many dimensions of this onerous corporate threat. It offered a definition, a list of risk factors, its impact on a company’s financial condition and proposed frameworks to mitigate its effects.