Thread by @SAH16928046

Met a CFA today who lost so much money, and only a few days back had the privilege of meeting a top broker in my country, who made millions on the same day!
Investment is not just about education.
Market whims matter when you trade-in & out of positions.
Research versus timing

Especially, Retail Banks, that have Capital Market and Investment Banking Desks, lose so much money on bad days.
Banks should cap their equity market exposures using some haircuts such as capital, etc.
It's not their forte.

As an #ERM Consultant, I normally don't advise conservative commercial banks to venture into financial derivatives and structured products.
It's high risk because firstly, they don't have the trained manpower, secondly, they lack the intelligence, and, lastly, the risk appetite.

Retail banks normally in most jurisdictions have to adhere to an ADR Advance to Deposit Ratio Limit set by the supervisory authority.
The rule of thumb is 75%, after which the residuum 25% is left for the treasury and capital markets
ST Placements & Risk-free bonds were the norms

Of course, Treasury and Capital Market Desks are NOT your run of the mill Banking
That is where Commercial/Retail banks lose money!
The same holds true for Insurance firms that underwrite unusual risks, which is contrary to their business model
Mutual Funds when they imitate HFs