Forbes January 2, 2025
By Adam Ennamli, Chief Risk Officer at General Bank of Canada, former VP O&T at Thomson Reuters. Global Board advisor on strategy and risk.
Risk models at Credit Suisse had flagged the dangers before their $5.5 billion Archegos loss. Silicon Valley Bank’s risk metrics showed clear warnings before their collapse. In both cases, sophisticated risk systems functioned as designed. Yet both institutions failed. The reason? Human behavior overwhelmed risk controls.
The Paradox Of Modern Risk Management
While risk models become more powerful and more sophisticated, we risk professionals are faced with a paradox: We often place too much faith in these systems. This excessive trust makes our organizations more vulnerable to basic human biases.
FTX is a perfect example. Despite...
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