Accounting homework help
In the aftermath of the 2007-8 Global Financial Crisis, Andrew Haldane, Chief Economist, Bank of England in a speech entitled ‘Why Banks Failed the Stress Test’ concluded that:
“Risk management models have during this crisis proved themselves wrong in a more fundamental sense. They failed Keynes’ test – that it is better to be roughly right than precisely wrong. With hindsight, these models were both very precise and very wrong.”
Required: Critically evaluate Haldane’s statement in the context of modern risk management methods such as Value-at-Risk; the evolution in risk management since the Global Financial Crisis; and a series of high-profile rogue trader and operational risk episodes.
What are the key lessons that can be drawn from these issues for the future of risk management?
“Risk management models have during this crisis proved themselves wrong in a more fundamental sense. They failed Keynes’ test – that it is better to be roughly right than precisely wrong. With hindsight, these models were both very precise and very wrong.”
Required: Critically evaluate Haldane’s statement in the context of modern risk management methods such as Value-at-Risk; the evolution in risk management since the Global Financial Crisis; and a series of high-profile rogue trader and operational risk episodes.
What are the key lessons that can be drawn from these issues for the future of risk management?
Talk to us support@bestqualitywriters.com