Bank Risk Management: Theory

Not too many years ago, then then Chairman of the U.S. House Banking Committee told me it was out of the question to require bank and savings and loans to mark their assets to market. Would anyone responsible for financial regulatory overdight have the temerity to be similarly dismissive today? I suspect the answer is yes. However, the increased attention formal, scientific appraisal of bank risks has received since then is gratifying to me and, I imagine, to most financial economists. The fact that contemporary bank risk management employs many of the important theoretial and methodological advances in our field is a source of collective pride