Monday, February 23, 2009

9 Commandments of Risk Mangement

I, let's just say stumbled upon an interesting article explaining the 9 rules of risk management developed by the RiskMetrics group. I was excited at first as the author of the article suggested that these simple rules are the only guidelines a risk manager needs to make confident risk management decisions. Before I started reading the 9 rules I was excited to find out that I would know everything that there is to know regarding risk management in a matter of minutes...
Oh, but I was wrong! I started reading the 9 rules and it reminded me of the 10 commandments of the bible. Short sentences that tells us what to do even though we all know it already. For example, the first rule says:"There is no return without risk", the 8th rule says:"Use common sense". The entire list of rules are common sense and also all the material we covered in the first five minutes of our first lecture. There is no way that this article is all that I would personally need to be a successful risk manager. Sorry, try again RiskMetrics.

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