In 2007 we had the subprime mortgage financial crisis (Subprime-Krise). Cesar Magnaye shares his thoughts On The Subprime Mess, Investment Banks, Risk Management and Driving.
Cesar tells about an near-accident he experienced on his way to the office and then shows certain parallels to the subprime mess. He summarizes four lessons:
Lesson No. 1: If it’s raining, the road must be slippery
If you see indications for something happening – don’t ignore them.
Lesson No. 2: When you see the orange light, stop; it will turn red soon
Don’t ignore rules thinking "nevermind – this time I don’t need them"
Lesson No. 3: Invest in fail-safe systems; they just might save your life
Even if you obey rules – something might go wrong. It’s good to have an insurance policy.
Lesson No. 4: Even with fail-safe systems, these can only work under certain conditions
Don’t forget to pay your insurance bills.