A Cultural Fix for Risk Management Failure

How to create a culture that combines healthy risk taking with effective risk management. Want to buy a pile of second mortgages with a loan-to-equity value of 99 to 1, and scant documentation on borrower qualifications? (By the way, those borrowers might not live in the homes they’re mortgaging.) And, sure, it’s possible the borrowers are lying about their income and job status. (But who cares?) Today, even considering such a package seems ridiculous. Yet most of these loans, part of

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