Teaching Financial Risk Management (click here for the full story)

My colleague Pia asked me to teach Financial Risk Management and I learned the similarities to Risk Control.

So Pia asked me to talk about Financial Risk Management.  I told her that it really is only loosely related to Risk Control.  She said for me to give it a go anyhow.

After an afternoon of using Wikipedia to figure out the similarities and differences, I taught the class the following:

1. Traditional Risk Control Techniques - these are the same things I would teach grad students in Process Hazard Management at Stout (but in only an hour, not a semester)
2. How is Risk Control different from Financial Risk Management - it turns out they are quite similar, except for the tools involved.  Another big difference is that Risk in finances is not necessarily negative. Sometimes taking a risk in business can pay off.
3. Case study - we talked about what brought about the financial meltdown in America.  Specifically how did homeowners, local banks and investment banks all contribute to the worldwide crisis.
4. Discussion - our discussion focused on what are the risks and controls that would be appropriate for the various parties of our case study.

All in all, this worked pretty well.  I was honest with the students that I wasn't a finance person, but I believe they got something good out of it anyhow.