Risk Mismanagement on Wall Street
Long article from the New York Times Magazine on Wall Street's risk management, and where it went wrong.
The most interesting part explains how the incentives for traders encouraged them to take asymmetric risks: trade-offs that would work out well 99% of the time but fail catastrophically the remaining 1%. So of course, this is exactly what happened.
Posted on January 26, 2009 at 7:08 AM • 22 Comments