Risk Management: Security and Commodity Traders

1
Risk Management Security and Commodity Traders

• Dan Koesters
• Creighton University
• Finance 340
• December 3, 2001

2
The Process of Risk Management

• Identification
• Measurement
• Control

3
Identification

• Past Problems
• Internally
• Externally
• Areas needing improvement

4
Internal Problems Employees

• Fraudulent activities
• Lack of Knowledge
• Rogue Traders

5
Rogue Traders

• Someone within a company whose behavior and
  risk-taking is intentionally inconsistent with
  the aims of management or its shareholders.

6
Who are they?

• Barings Bank
• Daiwa
• Morgan Grenfell
• Jardine Fleming

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Why Such a Problem?

• Complexity of Problems
• No Intention of Causing Loss for Employer
• Not Always Just One Employee
• Can be a group covering up for each other

8
Measuring the Problem

• What is the Effect on Your Business?
• Is Further Investigation into the Matter Needed?

9
Controlling Risk

• Preventing or Minimizing the Risk
• Many Solutions
• Most Still Being Developed
• Risk Management Team
• Purchasing Insurance