February 2018
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Guard Your Optimism

Increasing you margins of error can help manage greater uncertainty

Despite what many think, risk management is not about being an optimist or a pessimist, but about being prepared. The current economic situation has enough conflicting signals to satisfy both parties, but in risk management terms, it merely underlines the need for being prepared for both.

If your cup is [...]

Managing Political Risk in High-Risk Countries

Keeping a low profile is not always enough

Iran has forced a German company, Knauf Gips KG, to issue a letter threatening to dismiss any employee that participates in protests against the Iranian government. The firm says it issued the letter in order to secure the release of an employee, a dual German-Iranian citizen, who was arrested [...]

Take a Good Look First

Secondary and Tertiary Risks and Vulnerability

Political risk takes many forms, both foreign and domestic, and sometimes it can be indirect. The firms that provide goods and services to Chrysler’s suppliers doubtlessly are following the automaker’s bankruptcy closely to see if the suppliers will be paid in full – and what will happen if they are not. [...]

Buyers - and Sellers - Beware

Political Risk

Political risk is often overlooked in risk analysis. The focus tends to be on the market, the competition, and there is a reluctance to spend time on unfamiliar risks. Assessing political risk often requires wider margins and allowances, but several recent examples are proving that it can be very expensive.

Political risks are usually easier to [...]

Daily Telegraph – Germany’s Slump Risks ‘Explosive’ Mood as Second Banking Crisis Looms

It is always worth having more than one scenario on hand when planning for the future. A most probable scenario and a most dangerous scenario are a good start. The data can come from a variety of sources, and it is wise to follow several, preferably with differing views.

Much of the business press is upbeat, but [...]

The Economist – The Curse of Politics

Risk does not always fit on an x-y axis. Risk comes in many forms and it can be effectively managed only after being analyzed comprehensively. This article looks at some of the political risks that governments face as they manage the current banking crisis. What should be done and what can be done are [...]

Political Risk – “UBS halts foreign travel over tax worries”

The odds are long on the chance that any of UBS’s private bankers ever thought their career choice physically would confine them to Switzerland, but this seems to be a time when the unusual is not so unusual after all.

Political risk is generally thought of in terms of taxes and regulation or [...]