
30 Operational Risk Control
Apart from being nonsense in the investment sense, these involve an inordinate
amount of legal risk (see Chapter 3). Clients are very likely to sue in court because
very few gimmicks really work. For instance, attempts by banks to offer derivatives
on property prices and on inflation have failed.
The operational risk embedded into pseudo-novel, untested, and largely misunder-
stood instruments is so much more pronounced because most of these gambles are
masquerading as hedges. Yet, guessing the level of non-farm payrolls, for instance, has
greater similitude to horse racing than to investing. As a business it is not serious, ...