Risk Management: History, Definition and Critique

Georges Dionne ()

Cahiers de recherche from CIRPEE

Abstract: The study of risk management began after World War II. Risk management has long been associated with the use of market insurance to protect individuals and companies from various losses associated with accidents. Other forms of risk management, alternatives to market insurance, surfaced during the 1950s when market insurance was perceived as very costly and incomplete for protection against pure risk. The use of derivatives as risk management instruments arose during the 1970s, and expanded rapidly during the 1980s, as companies intensified their financial risk management. International risk regulation began in the 1980s, and financial firms developed internal risk management models and capital calculation formulas to hedge against unanticipated risks and reduce regulatory capital. Concomitantly, governance of risk management became essential, integrated risk management was introduced and the chief risk officer positions were created. Nonetheless, these regulations, governance rules and risk management methods failed to prevent the financial crisis that began in 2007.

Keywords: History risk management; risk management and financial crisis; regulation; Basel Accords; banking (search for similar items in EconPapers)
JEL-codes: D81 G21 G22 G32 G38 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-his, nep-ias and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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Related works:
Journal Article: Risk Management: History, Definition, and Critique (2013)
Working Paper: Risk management: History, definition and critique (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:1302

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