A broader view of risk

Citation

(2011), "A broader view of risk", Strategic Direction, Vol. 27 No. 3. https://doi.org/10.1108/sd.2011.05627cad.006

A broader view of risk

Article Type: Abstracts From: Strategic Direction, Volume 27, Issue 3

Widmer L.Risk Management, October 2010, Vol. 57 No. 8, Start page: 32, No. of pages: 3

Examines the recent financial crisis in the US mortgage and property market and compares it with a similar US financial crisis in 2000 to illustrate how sensible risk management practices tend to be discarded or overlooked when there are indications of quick profits to be made. Argues that, in hindsight, most of the country’s past major economic meltdowns were predictable and in some cases they were predicted years earlier, while it is likely that there are risks to current businesses that may also later seem obvious. Illustrates these points with particular reference to early warnings that were given of the impending financial catastrophe, and which were ignored, possibly through a case of ’illusory superiority’, in which the individual’s opinion of reality is much more favourable than reality itself, and where this causes disasters through a dangerous action not being considered a viable risk.Article type: Viewpoint ISSN: 0035-5593 Reference: 39BB583

Keywords: Company failures, Credit control, Economic depression, Finance, Financial institutions, Recession, Risk management, USA