"The trading strategy, which was subject to the bank's risk limits and used by many in the marketplace, was based on a legitimate market view that diversified and lowered the bank's portfolio risk during the peak of the financial crisis, " Deutsche Bank's Mr. Golden said in the statement.
But Goldman's trading positions were approved by the bank's risk committee, which included all the senior managers.
Possibly, the bank's risk controls were decent enough, but its bosses chose to ignore them for the sake of profits.
Such questions--and the knowledge that many other banks are not asking them--combine to keep the bank's risk managers awake at night.
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Ina Drew, who was chief investment officer, said the bank's risk models were flawed and that some London-based staff hid information from her.
First, they want to build statistical models mapping the severity and frequency of past operational risk losses and use this to judge the amount of the bank's capital at risk from operational failures in the future.
Morgan's bets from news reports, though the agency has 65 examiners who oversee the bank's books and risk-management controls.
This is a form of heightened scrutiny, though informal and less severe than some other options, and looks at a bank's capital and risk management, loan quality and liquidity.
"We've got the Veg-o-matic of risk management, " says Robert Mark, the bank's head of corporate treasury and risk management.
Providing unlimited liquidity to Cyprus would expose the European Central Bank's balance sheet to risk, particularly if Cyprus does end up crashing out of the euro.
The report also noted that Raymond James Bank's ratio of capital to risk-weighted assets was a healthy 10.2%.
Jaroslav Klapal, the bank's chairman, accepts that risk management was inadequate, but he has clung to his desk amid fierce criticism.
One suggestion is to allow a bank to reduce an asset's risk weighting if it can prove to supervisors its ability to evaluate the credit's specific risks.
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There's a risk that the Bank will always be fighting the last war and thus - possibly - paving the way for the next one.
He also conveyed the FSA's worries about the bank's culture, including the attitudes of its most senior staff to risk-taking, tax laws and banking regulations.
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He had also conveyed the FSA's worries about the bank's culture, including the attitudes of its most senior staff to risk taking, and flouting the spirit of tax laws and banking regulations.
"The borrower gets a low interest rate, commensurate with the interest of a conforming loan, and the bank mitigates its risk to some degree, " said Laurie Stewart, the bank's president and CEO.
Such a move could make those customers a more-favorable credit risk according to the bank's own underwriting standards, or it could deter the customer from staying with the bank.
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It was just the latest reminder of the long shadow cast by the trading loss, which has tarnished the bank's previously sterling reputation as a responsible risk manager and brought about two congressional hearings.
The report suggested that senior executives, including chief executive Jamie Dimon, were aware of huge losses at the bank, downplaying the risks in public, but also blamed federal regulators for a lack of oversight that allowed the country's largest bank to take on levels of risk.
Regulators overseeing a bank's activities often have to rely on the same models the bank uses to track its risk, experts said.
He pointed out that the boss of Lehman Brothers had held an extremely large holding of the investment bank's shares - but had still allowed the risk-taking that led to its collapse.
Under the scheme, if a bank's capital falls below 8% of its risk assets, the recommended minimum for institutions doing business abroad, the state would either lend money to it, buy its shares - or nationalize it.
With the tax now rejected, the form of the country's bailout remains unclear, but fears over the risk of contagion diminished after the European Central Bank said that it would provide support to the country's banks.
The Federal Reserve delayed its decision twice before approving the acquisition as some consumer groups argued that the deal would result in another too big to fail bank and would pose a risk to the U.S. financial system.
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Chowdhry downplayed the reputational risk to Satyam of the World Bank's bribery charges, noting that without offering any proof of wrongdoing, in contrast with other recent IT supplier-client disputes, the global institution seemed to have left itself open to a defamation suit.
The unexpected collective move by the U.S. Federal Reserve, the European Central Bank, the Bank of Japan, the Bank of Canada and the Swiss National Bank were bullish for risk assets as the U.S. and European stock markets, and most commodity markets, rallied on the news.
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The risk of miscalculation has risen because the bank's mission has changed.
The second group included Goldman Sachs, Societe Generale, Barclays, Credit Agricole, BNP Paribas, Credit Suisse, Deutsche Bank and UBS. Moody's said these firms had varying risk factors, from high dependence on capital markets operations to limited liquidity and exposure to Europe.
Inside the largest U.S. bank by assets, there has been an acknowledgment that risk will sometimes backfire.
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