Book Excerpt: Chasing Goldman Sachs

Risk managers on Wall Street are about as popular and welcome as a sensible spouse or cautious bank manager whispering words of reason to a Vegas gambler about to bet the ranch at blackjack. The last thing that a Wall Street banker wants is for that risk manager to acquire enough power internally to force him to listen and limit the risk he's taking. Bankers see risk as a way to make profits for themselves and the firm's shareholders; risk managers, meanwhile, want to be sure the institution survives long enough to book those profits. Not surprisingly, those interests clash, and finding a compromise is hard because both have logic on their side. Play it too safe, and the bank won't make money; take too much risk, and the bank won't exist much longer.

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