Systems of money flow, of markets, and indeed of industrial production are subject to many risks. These include human error, legal scrutiny, and external abuse. The consequence of failure is immensely expensive, not just for the system, but for the institution, and possibly even for the wider industrial environment. Nick Kochan has written widley on operational risk in the wake of the highlighting of this risk by the Basel Committee.
Bankers may not have gone to jail as a result of their failure to manage the financial turbulence of the last few years, but politicians are determined that there should be no repeat of the mismanagement and greed that caused it. The issue is not just one of punishing bankers …
