Chief Risk Officer Named

The Ragged Neck Division of the Trust and Wealth Management Marketing blog is pleased to announce the appointment of P. S. Oliver Storm as Chief Risk Officer.

Though still a young kitten, Storm explored every inch of the perimeter of our kitchen and dining areas the other evening. Commendable due diligence.

As for risk assessment, Storm demonstrated extraordinary skill. When a human tapped her finger on the kitchen counter above him, Storm instantly understood the invitation. He crouched, tensed his muscles, crouched even lower, then . . .

"I'm still a little kitten. No way can I jump all the way to that counter top. And when I fall back down, I might not even land on my feet." Storm straightened up, flicked his tail and walked away.

Don't you wish the chief risk officers of our leading financial institutions had possessed Storm's skill at risk analysis?

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We humans lack Storm's finely-tuned instincts. Still, we have a rough idea of physical risks and limitations. Financial risk is what does us in.

To weigh financial risk requires the gathering of facts and figures, the computing of various potential outcomes and then the judging of whether the better potential outcomes are worth risking the bad outcomes. And we humans, most of us, aren't up to the task.

Peter Applebome in the NY Times contemplates what boobs we are:

Can anyone doubt that the demands on people to make reasonably intelligent choices with their money has so far exceeded their wisdom to do it, that maybe we should at least try to figure out some way to close the gap? If many presumably sophisticated Madoff investors were ruined, what chance do the rest of us have?

"One lesson of this year," Applebome concludes, "is that these days, no one, even the most financially secure, can afford to be stupid." True enough. But from the times of Tulip Mania and The South Sea Bubble, human stupidity and investing have gone hand in hand.

Isn't that why trust officers had to be invented?