Mallaby: Market health = less risk

In today's Washington Post, Sebastian Mallaby makes a straightforward case for Treasury policy that balances risk and regulation. The column addresses the big issue: can free markets accept less risk as a condition of sustainability?

Today, Angie and I are attending the Minnesota Society of Chartered Financial Analysts' First Annual Professional Development and Career Day. The "First Annual" tells its own story. Analysts, once the indispensable wizards of the economy, are now looking for work.

We're at the fair by invitation of our fabulous client, executive search guru Trisha McGovern, who will be giving a talk -- with a deck we put together -- on how financial executives can get back on the horse after being thrown. Trisha acknowledges that a typical "job search" is anathema for executives: a morass of process for people who are used to making decisions. By contrast, Trisha positions "career transition" as an educated sales proposition that favors the executive mindset: a market of talent and talent buyers. By knowing their strengths and the demands of buyers, merchandising accordingly and leveraging networks, executives are empowered to land plum new positions.

Bringing us back to markets and risk. Give a little to get more. Can aggressive personalities, and the financial industry that employs them, accept less risk when they want to score impressive gains? Can conservative personalities risk wandering outside their career brackets if they recognize their strengths are pointing elsewhere?

clipped from www.washingtonpost.com Geithner on the High Wire A Rescue Plan Has to Reduce Risk, Not Just Regulate It In his stunningly ambitious House testimony yesterday, Treasury Secretary Tim Geithner laid out three ways to fix finance. Large players -- be they banks, insurers or hedge funds -- must take less risk. A rejuvenated regulatory machinery must monitor the risks they do take, reining them in when they go too far. And if the first two measures do not prevent the failure of a major institution, the government must have the power to manage its collapse in an orderly fashion.