The big picture

Focusing only on measuring VAR and stress tests limits the role of the risk manager.And there are great benefits from a wider view of what risk management can achievefor a company. By Brett Humphreys

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Joe Risk Manager is once again faced with a problem. He has been asked to evaluatetwo different potential investments his firm is considering and to give his opinion.The first investment is to purchase the rights to a natural gas pipeline. Thesecond investment is to purchase a partial interest in a power plant with theoption to buy the remainder of the power plant in five years. Using his riskmanagement tools, Joe breaks these investments down into their component partsand determines the

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