Risk Management Failures
I had compiled the attached list of “Risk Management Failures” originally for use in ERM training seminars in 2001. The original version was a list from an article on banking risk management failures (that I can no longer find to credit) combined with a list of insurer failures from my memory.
When I first showed this slide, one seminar participant said that at their Risk Committee meetings, the participants took turns giving a 1 minute summary of the story of various risk management failures. Others have said that they have used a list like this as part of a justification for risk management development.
Over the years, I have sporadically updated the list, adding both more current examples as well as some more historic events as I became aware of them.
There are doubtless many important examples that I am missing. Probably will no longer fit on one slide. (the original version used much larger font size)
So please share your suggestions for additional items that should be added.
1973: Equity Funding Fraud
1983: Baldwin United Shell Game
1984: Continental Illinois Bank Run
1986: The ZZZ Best Carpet Scandal.
1988: Equitable (NY) GIC losses.
1989: The US S&L Crisis.
1991: Salomon Brothers Bond Scandal.
1991: BCCI Scandal.
1991: Executive Life / First Capital Life Junked
1991: Mutual Benefit Liquidity Squeeze
1991 – 1996: Lloyd’s Asbestos Liabilities
1994 – 2002: Japanese Real Estate & Banking
1994: Orange County Default
1994: Kidder Peabody Fiasco.
1994: Confederation Life Failure
1994: Monarch Life Seizure
1995: The Barings Derivatives Scandal.
1996: Sumitomo Copper Scandal.
1997: The Natwest Hole.
1997: The Bre-X Mining Scandal.
1997: Smith Barney Investor Fraud.
1997: Bank of Tokyo-Mitsubishi Derivatives Loss.
1997: UBS Derivatives Model Problems.
1997: Prudential Insurance US Market Conduct
1997: Nissan Mutual ALM Failure
1998: Griffin Trading Bond Futures losses.
1998: Russian Bond Debacle.
1998: The LTCM Risk Model Failure.
1998: Asian Economic Flu Crisis
1999: Toho Mutual & Daihyaju Mutual
1999: General American Liquidity Failure
1999: Korea Life ALM Losses & Failure
1999: Unicover Fiasco
2000: Equitable UK Pension guarantees
2001: American Express CBO Losses
2001: World Trade Center
2002: Enron & Worldcom
2002: Conseco chokes on Green Tree
2002: HIH Surprise
2002: Amer Skandia VA problems
2003: Parmalat Accounting Scandal
2003: Allmerica VA reserving
2003: Annuity & Life Re Overgrowth
2004: Marsh Contingent Commissions
2005: AIG Finite Re
2006: Scottish Re Tax Asset
2006: Hurricane Katrina
2007: Bear Stearns/Countrywide/??? Sub Primes