A Refreshing Look At Risk….

by. Jim Blaine

Spent some time this week at a Federal Reserve Bank of Atlanta (FRBA) sponsored Financial Markets Conference. Know most of you will find it highly unlikely or hilarious, but it was quite an enlightening experience.  Had some legendary folks in economics in attendance, including the “Big Boss”, Ben Bernanke. Amazingly security was very light; guess no one in his right mind would knowingly try to “break into” an economics conference; and the last group you would ever want to hold hostage would be a group of economic theorists (talk about cruel and unusual punishment !).

There is certainly a profound world of difference between listening to some seriously serious folks discuss stress testing, interest rate risk, and the issues surrounding the future regulation of the financial industry, and in what most credit unions hear from our examiners.  The chief differences are the readily expressed uncertainty by the experts as to the best way forward for regulation in this difficult economic environment; the readily acknowledged weaknesses, flaws, and limitations in all the standard economic risk measurement models; and the readily expressed need for regulatory humility and an openness to dialogue in the face of a rapidly changing economic risk environment. Highly encouraging, very refreshing !!

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