CFS/FIRM Conference on Behavioral Risk Management

On March 14th, a CFS/FIRM conference on Behavioral Risk Management took place in the House of Finance. The event, which has been organized by Thomas Kaiser (Goethe University and KPMG), Mark Wahrenburg (Goethe University) and Bernd Weber (Bonn University and CENs) and sponsored by Frankfurt Institute of Risk Management and Regulation (FIRM) has been attended by more than 70 participants. The idea was bringing together risk managers of banks and insur-ance companies, regulators, academics and other professionals to discuss current topics of this fairly new and important area of risk management.

Bernd Weber gave an insight into the „Neuroscience of risk taking“. Then Dien Pham (Leibniz University Hannover) presented her research paper „Experimentally validated general risk attitude among different ethnic groups – The case of Dak Lak, Vietnam“. The first panel discussion was held on Risk Culture in banks. The panel included Thomas Kaiser, Peter Prebil (ERSTE Group), Thomas Poppensieker (McKinsey) and Mark Wahrenburg. Nir Vulkan (Oxford University) presented on „Naked Aggression: Personality and portfolio manager performance“. „Behavioral patterns in rogue trading: Analysing the cases of Nick Leeson, Jérôme Kerviel, and Kweku Adoboli in light of the control balance theory“ was the topic of a presentation by Sebastian Fritz-Morgenthal (Bain & Company) and Hagen Rafeld (Deutsche Bank). Udo Milkau (DZ BANK) spoke about „Management of behavioral risk in the first line of defence – between culture, training and artificial intelligence“. The conference concluded with a panel discussion by Günter Franke (Konstanz University), Bernd Weber, Sebastian Fritz-Morgenthal und Carsten Lehr (Federal Republic of Germany Finance Agency) on Mitigating Behavioral Risk.

The audience engaged very actively both in the panel discussion as well as in reaction to the presentations, demonstrating that the topic is of high relevancy both for academia as well as for practitioners. All presentations released by the respective authors for this purpose are available for download here.

Thomas Kaiser, Goethe University and KPMG