There are plenty
of simplistic introductions to financial risk management on the market. This one
doesn't stand out.
The author's
background as a trader shows through, so the book reads almost as a "trader's
perspective on risk management." There are plenty of discussions of various
traded instruments and derivative structures, but not a whole lot on the actual
practice of risk management. The author presents more the problems risk
management addresses than the actual ways in which risk management addresses
those problems. Her discussions of market risk management focus on the hedge vs.
not-hedge decision, but that is more of a trading issue than a risk management
issue.
Contents
1. What is financial risk management?
2. Identifying major financial risks
3. Interest rate risk
4. Foreign exchange risk
5. Credit risk
6. Commodity risk
7. Operational risk
8. Risk management framework : policy and
hedging
9. Measuring risk
10. Global initiatives in financial risk
management
I saw little mention of a daily risk report, market risk limits, stop-loss
limits, economic capital, risk management staff or a risk management committee. I am not sure what
qualifications the author has to be writing about risk management, but she seems
out of touch with what actually goes on in a risk management department. The
book doesn't even mention a risk management department.
Ten years ago,
when risk management was just taking off, this book might have been useful.
Today I expect more. [June 31, 2006]
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