Risk Pearls of Wisdom

Being a risk manager involves reading risk reports that provide the complex cold numbers but little else.  Risk managers need to place the report into spatial and temporal context to understand where the market or world is in the"distribution".  The podcast discusses how the world, in general, operates along with concentric cycles and also pendulums.  Sometimes the planet passes a crossover point that snaps the current state to the opposite side of the distribution.  I never said being a risk manager is easy.

This episode discusses the physical nature of commodities notably oil and gas.  The ultimate physical commodity is strangely power and has several here-and-now features.  We discuss the introduction of renewables into the mix and a potential way forward using risk management as the anchor.

(Apologies to the Goddess of Rock, Patti Smith for the title taken from "People Have the Power")

We start a new series by introducing KFC strategies to show how risk managers can talk to business heads and traders.  The art is to avoid an "I win, and you lose" approach when discussing complex and charged topics such as evidence of excessive risk that requires a reduction strategy.  Involves lashing one's boat to another and row together.

The imminent default of the most indebted property developer, Evergrande, has triggered much debate amongst risk folk.  Will there be spiralling of property prices started by dumping stock at fire-sale prices?  Who is going to buy them? Are they catching a falling knife?  The answer is that we do not know how things will unfold. We can only draw from history, consider other crises, and see if we can stitch together a stress test.

(Apologies to scholars of Nietzsche for this title)

This episode of RPW looks at the unintended consequences of government officials telling an already skittish population "Don't Panic".  We talk about how people can be rational, including risk managers, as we look at the human psyche that separates sensible micro-decisions that aggregates into panic-like crowd dynamics. 

(Title is a tribute to the opening of Queen's Flash Gordon, de de de de de de de de de Flash a-ah)

This episode covers the second climate change risk category called "Transition risk" faced by corporates who need to reduce their carbon footprint radically.  It covers several concepts, including how ill-conceived policies can work against those ready to innovate and transition. 

A recent crisis in a company called Evergrande has prompted the age-old question of "how much is too much".  The answer always involved look back at a seismic event and wonder why people did not see it coming.  The answer is that they probably did, but who cares when there is money to be made.

(apologies to Babs S and her lyrics to Evergreen from A Star is Born)

In the second on the RPW climate change series, we discuss the first CC risk factor that is Physical Risk.  We discuss the policy-investment-resilience model used to reduce the impact of extreme weather conditions on housing, arable land and company assets.  We take a history lesson on what happens when the national and geopolitical stage is weak and how they are susceptible to external shocks.

This podcast provides a brief history lesson of the last invasion of the UK and the subsequent run on the banks.  We talk about how banks provide the impression of solidity through architecture.  With challenger banks without branches and the printing of money, what does the future of banks and payments look like?

(Apologies for the title that is copied from Monte Python's Holy Grail)

The link below is the post mortem document penned by internal and external counsel.  To say it is brutal is an understatement.  It is thus required reading for any senior risk manager to pray this does not happen in their patch.  In this podcast, we pick up on three keywords used: lackadaisical, perfunctory and holistic.  May we all embed these in any risk manual.

(the title is a derivation of the Standard Foreign Office response in a time of crisis, stage 2.  A favourite Yes Prime Minister dialogue, episode 6)

https://www.credit-suisse.com/about-us/en/reports-research/archegos-info-kit.html