Counterpoint: Merrill Lynch “enhanced risk management before crisis.”

Merrill Lynch & Co. enhanced risk controls in the years before mortgage losses eroded its capital and led to a forced sale to Bank of America Corp. in 2008, former co-President Ahmass Fakahany said. “The risk dynamic in the financial-services industry was getting broader and more complicated, especially on the regulatory front, and so we had to buttress our capabilities,” Fakahany, 52, said in an interview aired today on Bloomberg Television. “We expanded the number of risk managers on the trading floor.”

[Bloomberg]

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Comments (22)

  1. Posted by Herpderp | October 29, 2010 at 7:43 PM

    1nd

  2. Posted by Herpderp | October 29, 2010 at 7:54 PM

    1nd

  3. Posted by Anonymous | October 29, 2010 at 8:01 PM

    Enhanced risk management at Merrill ca. 2007 = Enhanced watertight bulkheads on RMS Titanic ca. 1911…

  4. Posted by indridcold | October 29, 2010 at 8:02 PM

    one ibank’s garbage is a BoA treasure.

  5. Posted by Guest | October 29, 2010 at 8:13 PM

    Well, to be fair (and assuming you follow Taleb’s logic), all risk managers suck. Hence, this is a surprise?

  6. Posted by Guest | October 29, 2010 at 8:44 PM

    Enhanced risk management. Does that mean they required them to all get implants?

  7. Posted by Karl | October 29, 2010 at 10:22 PM

    Glamor Shots on the ID badges is what I heard.

  8. Posted by xel | October 29, 2010 at 11:39 PM

    I wonder where our risk manager is, haven’t seen him in years…

    -Bearsterns trader

  9. Posted by Schaumburg IL CPA | October 30, 2010 at 3:28 AM

    Does any firm have risk mgrs anymore?

  10. Posted by Anonymous | October 30, 2010 at 4:29 AM

    To manage risk we must first understand risk. How do you avoid risk and what makes it so risky?

    http://www.youtube.com/watch?v=laKprX-HP94

  11. Posted by Wake up people | October 31, 2010 at 2:44 AM

    Is this guy for real he drove this company into the ground along with Stan O’Neal. The re-writing of history is ludicrous. Sounds like he’s stomping for that Conan O’brien lookalike Greg Flemming. Somebody please ask Ahmass if he paid his child support yet for the Australian Stripper he knocked up. Check out NY post archive from 11/30/2005. What a complete jackass I believe the headline was 10 million dollar man doesnt pay child support. If you werent going to pay for your kid you should have at least had those wonky eyes of yours fixed asshole. You can’t claim to be the smartest guy in the room without being complicit or compliant which one was it?

  12. Posted by Sanity check failed | November 1, 2010 at 1:57 AM

    I think you mistyped the website to which you meant to post. You typed http://www.deal breaker.com, I think you meant http://www.rantingsbyawhackjob.com.

    HTH, HAND

  13. Posted by John | November 1, 2010 at 1:18 PM

    no surprise. most large banks deliberately selected clueless duds to run their risk management divisions, The roles were simply to rubber-stamp risky bets, without any understanding of the broader implications for the institution and the financial system.

    Most were there simply to give the bank external credibility. Senior mgmt was gambling on too-big-too-fail and govt bailouts from the start for when the ponzi scheme would ultimately unravel, which is exactly what happened.

  14. Posted by angry @ ahmass | November 1, 2010 at 5:01 PM

    wake up people!

  15. Posted by Dead_Cat | November 1, 2010 at 4:55 PM

    Risk management has middle office status and middle office pay, with little prospect of entering the higher echelons of management (with one or two notable exceptions). Also means the smartest don’t tend to pursue it. So when the guy who’s a hero for making tens of millions by levering a rising market 50:1 comes up against the risk manager who thinks this may not be a good idea long term, who is going to win that argument?

    Contrast that to when ibanks were partnerships (and not limited liability partnerships either). The risk managers were the partners themsleves, who were liable for losses as well as being the leading profit generators.

  16. Posted by Gts | November 2, 2010 at 2:16 AM

    This guy thinks that people will believe his lies! Come On HAMAS!!!! We can see right through your BS…..
    Just because you say its true doesn’t mean its true.

  17. Posted by tranche monkey | October 29, 2010 at 8:10 PM

    112 former co-VP’s at Merrill are trying to get their MBA tuition refunds.

  18. Posted by tranche monkey | October 29, 2010 at 8:10 PM

    112 former co-VP’s at Merrill are trying to get their MBA tuition refunds.

  19. Posted by Guest | October 29, 2010 at 8:25 PM

    Ah yes, a guy with an MBA and background corporate finance as head risk manager, that ought to end well. Economic capital is what they measure GDP with, right?

  20. Posted by Guest | October 29, 2010 at 8:25 PM

    Ah yes, a guy with an MBA and background corporate finance as head risk manager, that ought to end well. Economic capital is what they measure GDP with, right?

  21. Posted by AIG Risk Manager | October 29, 2010 at 9:30 PM

    It was commonly stated that Merrill risk managers were way over-rated.

  22. Posted by AIG Risk Manager | October 29, 2010 at 9:30 PM

    It was commonly stated that Merrill risk managers were way over-rated.