Risk: The New Management Imperative in Finance

Global Risk Management's Emergence 1

The past twenty-five years have seen more changes in capital markets than were introduced in the entire prior history, which spans centuries. Increased global trade is only one factor that has contributed to stepped-up activity in capital markets everywhere. Product diversity in financial markets themselves has exploded. New derivative products, which parse and price specific financial exposures, are brought to market daily. Widespread deregulation has increased competition, narrowed spreads, and lowered barriers to the flow of capital. Tremendous growth in the volume of market trade and product diversification, coupled with falling unit costs, has largely offset the revenues lost from narrower spreads. As ...