THE SIX MISTAKES EXECUTIVES MAKE IN RISK MANAGEMENT

Abstract

We don’t live in the world for which conventional risk-management textbooks prepare us. No forecasting model predicted the impact of the current economic crisis, and its consequences continue to take establishment economists and business academics by surprise. Moreover, as we all know, the crisis has been compounded by the banks’ socalled risk-management models, which increased their exposure to risk instead of limiting it and rendered the global economic system more fragile than ever.