Risk Management Lessons Worth Remembering from the Credit Crisis of 2007-2009

This article by Golub and Crum presents six important lessons worth remembering from the credit crisis of 2007-2009. The recent credit crisis revealed the inadequacy of many standard methods in quantitative risk management and called into question the general efficiency of markets. Golub and Crum's analysis of the six lessons learned provides insights into what went wrong and offers advice on steps that institutions can take to avoid similar failures in the future. The authors present detailed analysis on risk management issues relating to liquidity, securitized products, certification, market risk, and policy risk.