# Introduction

The fluctuating fortunes of the banking sector in recent years have proved how difficult it is to judge a bank's risk management strategy during boom periods. It is revealing that two firms to report record profits during the heady days of 2006 were Switzerland's UBS ($9.1 billion) and US insurer American International Group (AIG) ($14 billion). A third, Citigroup (at the time the world's largest bank), recorded a profit of \$21.5 billion - its second-best year.At the time, it could have been