Description: In the financial world, survival, let alone profitability, is no longer a given. The risks facing banks, thrifts, brokerages, insurance companies, and traders are plain for all to see. However, within risk lie rewards. Facing Up to the Risks explains why somewhere in the world nearly every day brings news of another bank, crippled insurance company or busted brokerage laid low by lax vending, swamped by unprofitable business or even mired in scandal. It explores through vivid case studies and colorful anecdotes how financial firms of all types can not only avoid disaster, but grow and prosper as well. Casserley argues that the continuing carnage in the financial world can be traced to the fact that financial firms have forgotten that they are fundamentally different from all other businesses. They must seek out risk and embrace it if they are to grow and prosper. To do this, they must master three basic skills: valuation, to assess the degree and duration of risk; flexibility, to seize fleeting profit opportunities and changes as markets change; and resilience, to endure the inevitable catastrophies that are part of life in the volatile financial world. These skills can then be combined, with varying emphasis and proportion, into one of five strategies: segmentation, often used by credit card and insurance companies as they separate good risks from bad; insider, where financiers try to get "inside" a risk to gain advantage as in venture capital or leveraged buy outs; technical, where traders, often in derivative markets, use advanced math and computers to predict securities prices; inference, where investors attempt to deduce future stock and bond prices from deep analysis of marketsand companies; and scale, where competitors try to win in markets by being larger than their foes. The depiction of these strategies in action, from formulation through fruition is the heart of this essential and provocative book.

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