A Quote by Ben Bernanke
In the future, financial firms of any type whose failure would pose a systemic risk must accept especially close regulatory scrutiny of their risk-taking.
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For market discipline to constrain risk effectively, financial institutions must be allowed to fail. Under optimal financial regulatory and financial system infrastructures, such a failure would not threaten the overall system.
You just have to change. To be successful, what you have to do is have an acceptance of risk and you have to be pretty explicit about that, because if you don’t accept risk, you don’t get any innovation. And that means part of risk is you have to accept failure because not everything works.
to love is to risk, not being loved in return. to hope is to risk pain. to try is to risk failure. but risk must be taken because the greatest hazard in my life is to risk nothing.
To laugh is to risk appearing a fool. To weep is to risk appearing sentimental. To reach out to another is to risk involvement. To expose feelings is to risk exposing your true self. To place your ideas and dreams before a crowd is to risk their loss. To love is to risk not being loved in return. To hope is to risk pain. To try is to risk failure. But risks must be taken, because the greatest hazard in life is to risk nothing.
Risk managers and investment bankers and actually, all kinds of investors took on more risk than they expected. So there was a failure of risk management. There was a failure to recognize how much risk there was in some of these securities that people bought.
RE: GSEs like Freddie Mac & Fannie Mae: "creditors will continue to underprice the risk-taking of these financial institutions, overfund them, and fail to provide effective market discipline Facing prices that are too low, systemically important firms will take on too much risk."
Limiting the destructive risk-taking by large financial firms and banks which are 'too big to fail' is needed.
Among other objectives, liquidity guidelines must take into account the risks that inadequate liquidity planning by major financial firms pose for the broader financial system, and they must ensure that these firms do not become excessively reliant on liquidity support from the central bank.
Unfortunately, tools that transfer risk can also increase systemic risk if major counterparties fail to manage their own risk exposures properly.
In the financial system we have today, with less risk concentrated in banks, the probability of systemic financial crises may be lower than in traditional bank-centered financial systems
In the financial system we have today, with less risk concentrated in banks, the probability of systemic financial crises may be lower than in traditional bank-centered financial systems.
To place your dreams before the crowd is to risk ridicule. To go forward in the face of overwhelming odds is to risk failure. But risks must be taken because the greatest hazard of life is to risk nothing.
In some industries, we refer to risk taking as 'research and development.' At financial institutions, we often take risk by investing in securities.
The risk of working with people you don't respect; the risk of working for a company whose values are incosistent with your own; the risk of compromising what's important; the risk of doing something that fails to express-or even contradicts--who you are. And then there is the most dangerous risk of all--the risk of spending your life not doing what you want on the bet that you can buy yourself the freedom to do it later.
The Obama administration's plan is to have the Federal Reserve regulate banks that might pose a 'systemic risk' if they were to fail.
Most of the time, your risk management works. With a systemic event such as the recent shocks following the collapse of Lehman Brothers, obviously the risk-management system of any one bank appears, after the fact, to be incomplete. We ended up where banks couldn't liquidate their risk, and the system tended to freeze up.
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