5

Organization of Risk

In Part 1, we described the way that global entities organize themselves for transnational operations. In no place is that organization more important than the management of risk. Figure 2.5 returns to our four-sector axis for management and processing. Indeed, the method of operation presented in the figure and used elsewhere was developed in a project to define a means of risk management, as defined in the sidebar that follows.

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Figure 2.5 Market participants organize formally so that they may actively monitor and control potential risks.

Substantially every major commercial and investment bank has a dedicated risk manager ...

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