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Quote of the Week WK/E 07/10/11 October 8, 2011

Posted by Audit Monkey in Quote of the Week, The Joy & Pain of Internal Audit, The State of the British Nation.
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This week’s quote is courtesy of CityAM. For those not in the know, CityAM is a free newspaper distributed in the City for Finance types. Anyway, the UBS fraud is still rumbling away and CityAM reported after the departure of Carsten Kengeter, the Head of the Investment Bank, “more risk managers are expected to leave following the resignation of John Hughes, Kweki Adoboli’s boss and Chief Executive Oswald Gruebel”.

There’s a surprise, not. Risk Managers to leave the firm after failing to manage, well, risk. I’m now going to let you on a little secret; I don’t know what exactly Risk Managers actually do and my thoughts are not a lot. I actually think a lot of ‘risk management’ is a load of bollards, a pseudo science and much of it pretty meaningless.

An educated guess suggests they should have been monitoring trades for exceptional items, too much exposure with one particular counterparty and for unusual trends but on this instance, Kweki’s wheeler dealing has slipped under the radar. However, this is such a dull job that it would only attract dullards and the intellectually sterile so I’m not surprised the Risk team were caught napping.

Suffice to say, this was not the UBS Risk Department’s finest hour. This said, I’m not surprised.

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