"Dear God, send me an accident," or so goes every risk manager's prayer, jokes Eva Leighton, director of operational risk at Citigroup, making light of the difficulty risk managers face in using only risk data to effect organizational change. But those who uttered that risky appeal may have gotten more than they bargained for in the last six to nine months, as employees and criminals alike react to the financial pressure of the recession. "Fraud is going up dramatically - both internal and external - and that remains a concern across the industry," Leighton told an audience at a recent Global Association of Risk Professionals conference.
As Bank of America now knows, the most money is lost in "rogue trading" cases. You can bet BofA's risk team wasn't praying for an "accident" in early March, when a London-based currency trader was was accused of rogue trading activities resulting in losses of up to $120 million.