An old joke begins with a disheveled man asking a banker type for a handout. The banker sniffs, “Why don't you get a job?”
“I have a job,” replies the other man. “I watch for tornadoes.”
The banker exclaims angrily, “There have never been tornadoes around here!”
“See what a good job I'm doing?”
I wish I could say there are no tornado-watching risk managers—that is, no people with the title of risk manager who stand around nodding gravely and looking worried, taking credit when nothing bad happens and saying “I told you so” when something does go wrong. These people are even worse than the tornado watcher. He at least gives a clear and rational account of what he does. It's not hard to find risk managers, even in sophisticated financial institutions, who hem and haw when asked exactly what they do. If pressed, they come up with generalities or jargon. They cannot show you tangible evidence of any of it, and if you watch what they actually do—if anything—it doesn't correspond to their claims.