Its human nature not to accept responsibility for mistakes, according to Joe Rizzi, head of structured products at ABN AMRO's structured risk interface group in Amsterdam, who argues that if banks regularly attribute bad trades to bad luck they will not learn from their mistakes.
Star bankers are an example of firm's willingness to quickly reward employees with more reward and responsibility before they have built up a track record to show it is judgment and not luck. Rizzi said this especially prevalent in new sectors, which have not yet suffered losses.
In order to overcome many of these risks derivatives houses should look for diversity of opinion, he concluded.
