Could energy follow finance into meltdown?

Energy companies aspiring to gain Tier I status have long emulated the banking model, in which trading is the repository for pricing and the management of market risk. In light of what has happened to many banks, should energy companies be adopting this model, asks Lawrence Haar

With 2009 entering its final quarter, to observe that the last year and-a-half has been a challenging period would be an understatement. Since the collapse of mortgage-backed securities pounded the foundations of credit risk management, the scope for managing counterparty risk has been severely impaired. Major financial institutions have imploded. Economic uncertainty has led to a contraction in the monetary base through reduced lending and credit creation, leaving the scope for managing