http://organizationsandmarkets.com/2008/03/19/numbers-dont-lie-or-do-they/ Economics of organizations, strategy, entrepreneurship, innovation, and more Thu, 04 Dec 2008 00:27:57 +0000 http://wordpress.org/?v=MU hourly 1 http://organizationsandmarkets.com/2008/03/19/numbers-dont-lie-or-do-they/#comment-69882 Bart Fri, 21 Mar 2008 08:21:13 +0000 http://organizationsandmarkets.wordpress.com/?p=1435#comment-69882 In a recent <a href="http://www.sec.gov/news/press/2008/2008-33.htm" rel="nofollow">quick-scan</a> of big bank blunders by securities watchdogs following the credit crisis I find an interesting case to supoprt this too. The report basically states that banks that took a common sense approach to the employment of formal risk models, by regularly updating them to changing circumstances and by using “critical judgment” to employing model outcomes for decision making, actually performed better as opposed to banks that dominantly based decision making on their models. Somehow this made me think of the application of superior judgment resulting in superior performance. Judgment is even used as a word in the report! Quite the entrepreneurial act in an uncertain circumstance, it would seem, though not so directly tied up with asset ownership. Although… you could consider senior bank members’ reputation as an asset in judgment calls under these circumstances What do we make of that? In a recent quick-scan of big bank blunders by securities watchdogs following the credit crisis I find an interesting case to supoprt this too. The report basically states that banks that took a common sense approach to the employment of formal risk models, by regularly updating them to changing circumstances and by using “critical judgment” to employing model outcomes for decision making, actually performed better as opposed to banks that dominantly based decision making on their models. Somehow this made me think of the application of superior judgment resulting in superior performance. Judgment is even used as a word in the report! Quite the entrepreneurial act in an uncertain circumstance, it would seem, though not so directly tied up with asset ownership. Although… you could consider senior bank members’ reputation as an asset in judgment calls under these circumstances
What do we make of that?

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