A behavioural lens could help manage human risk
Human decision-making needs careful watching. For that, behavioural science can help
“We’ve just opened a new desk; it’s going to be very profitable,” the regional head of an international bank enthused. Nothing too unusual in that, except this was happening right after the financial crisis, and I was his UK regulator.
“Talk me through the risk profile,” I said.
“Sure. Let me get the desk head,” he replied.
“How about you explain it to me?” I responded.
It turned out he couldn’t – so I suggested he suspend trading, until such time as he could.
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