Risk Management (and the lack of it) lies at the heart of the crisis!

The book explains why the risks to the global economy and the markets continue to be high and why it will take many years to digest the fallout.

Eye of the Storm takes you to the core of the financial world and explains the dynamics behind what may become the largest financial crisis in history.
The book offers a broad historical and political background, visualizes the main drivers that have led to the crisis and distills some of the key issues necessary to its resolution.

For much of the past three decades, risk management was neglected and distorted on virtually all levels of systemic importance. The wholesale application of the theories of Modern Finance imparted a false sense of security throughout the financial system and our economies. It supercharged credit creation and leverage, enabled harmful institutional transformations and dissociated decision processes from the real risks in our economies and markets.

What got us here goes deeper than mere lack of capital (i.e. excessive leverage) or regulatory negligence. Just as large banks strayed from their core business – relationship/commercial banking – financial markets strayed from their core purpose, namely the efficient allocation of risk and capital.