As news emerges that Merrill Lynch is posting a loss of almost $8bn for the latest quarter (which seems like rather a lot), my eye was caught by this lovely little throw-away snippet in the FT (subs. required):
>Robert Law, banks analyst at Lehman Brothers, said: “One of the biggest issues with the sector has been that people haven’t really known where these exposures are and how much they are.”
Sounds like a questionable approach to risk management to me. All the odder when people are widely saying that commercial litigation is dead, at least in its traditional form, because there is so much more regulation and internal risk management. While there is certainly more of both, it doesn’t seem to be doing much good in the investment banking sector at present.
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