Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Worswick who wrote (38)	9/6/1998 3:46:00 PM
From: Henry Volquardsen	Respond to of 2794

Interesting article. Two comments. First the inability of the bank in question to accurately monitor the collateral on those mortgage backed securities is exactly what I referred to in an earlier post about system and operational risk. This is most likely a recent addition to that particular firms product offering and I wouldn't be at all surprised if some over aggressive front office people got in to this line of business without arranging sufficient support. Somewhere there are probably some over worked back office people struggling with insufficient support systems who are going to catch hell for this. Second, the fund manager strikes me as fairly pompous. He is withdrawing his business from a bank because of their inability to monitor colateral? Perhaps his investors should withdraw from his fund because his own lax systems allowed some "junior guy" to invest millions of their dollars in mortgage back swaps in a place he didn't even know... existed, (and) still can't pronounce its name. Sounds like his own monitoring systems suck and his criticism of the bank is very much the pot calling the kettle black.