JPMorgan Chase’s recent admission that a trader in London lost $2 billion trading in credit derivatives is yet another reminder of the importance of spelling out a company’s risk appetite and integrating it with risk-management practices.
Three years after the financial crisis, it’s clear that companies are still struggling with how to manage risk in the organization. Part of the difficulty is that getting a handle on risk across the organization is a complex undertaking which requires a careful balancing act.
