Risk Management In The Ancient World Was Also Sometimes A Thankless Task

Events that are currently unfolding would appear to suggest that risk management in some major financial institutions has perhaps left something to be desired - so where were all the risk managers ?

In my view, this is one of those cases where there may be lessons that we can learn from the ancient Greeks. There are some truths about both human nature, and the management of risk, which stay the same, regardless of context. One such example might be the story of Cassandra.

Some might think that we shouldn't attempt to draw parallels between the bloodletting on ancient battlefields and the goings on in the modern financial system, but I would have to disagree. The story of Cassandra goes something like this...

Cassandra was a prophetess in ancient Troy; she was the daughter of King Priam and Queen Hecuba. In our modern-day parable, she might be a portfolio risk manager in a finance house.

Being a dedicated and pro-active risk manager of the ancient world, Cassandra used her powers of prophesy, and warned of disaster. She warned the Trojans that she had foreseen the arrival of the Trojan horse, the destruction of Troy, and the death of Agamemnon.

Unfortunately, being somewhat inconvenient, her forecasts were not considered to 'add value' or to conform to 'best practice' in the ancient world, and so she was ignored and locked up, suspected of being mad.

Even more unfortunately, when Cassandra's predictions came true, she was not promoted and given a substantial performance bonus - instead she was raped and murdered.

I'm sure there is a lesson in there somewhere.

The author was a senior risk manager at a major UK bank until 2003.