Mark E Almeida

[W]e meet in an hour of change and challenge, in a decade of hope and fear, in an age of both knowledge and ignorance. The greater our knowledge increases, the greater our ignorance unfolds.

John F. Kennedy, September 1962

After an entire decade, for a generation of finance practitioners the scars of the 2007–9 global financial crisis remain, if not fresh and intensely painful, then surely sore and ever-sensitive to the touch. We have been chastened for the over-confidence in quantitative analytical techniques that gave rise to virtually unrestrained risk taking. The excesses of leverage and CDO-squareds have left financial engineering and innovation in disrepute.

The response to the crisis, prompted by financial regulators worldwide, could be fairly characterised as a “back to basics” approach, with emphasis on more robust, fundamental risk management practices. To illustrate at the risk of over-simplifying: US regulatory focus on the data management practices of large banks was born of the Lehman Brothers failure. Much to the surprise of the New York Federal Reserve Bank (among other supervisors), the largest, most sophisticated US banks could not quickly and accurately

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