Summary
Sufficient internal controls were lacking and financial statements were misstated. Risk taking authority had been disproportional to accountability. Risks of the cycle can be better managed with the optimal blend of practical risk assessment and incentive alignment. Service fee business income can help relive the overall capital burden.
Analysis
Impact this news will have on companies is to improve all aspects of the risk management process and possibly spur development of new risk sharing and transfer techniques.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
