In the proverbial ‘beginning’, formal risk management – which entails not only measurement and reporting of risks, but, also, prudent management and governance of risks – was primarily only practiced by a select number of large global investment banks, such as JP Morgan, Goldman and Citi. It is not hard to understand why these types of financial institutions, which are highly regulated and routinely take tremendous amounts of balance sheet risk, as well as market and credit risks, would be doing sophisticated and comprehensive risk management.
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