Charles Duhigg Quotes

Credit default swap gives you something to do. You can buy some credit default swaps from them to protect yourself against the bankruptcy of people who owe you money.

After 9/11, the businesses in my district and throughout the New York metropolitan area saw firsthand the result of a lack of availability of terrorism insurance.

Credit ratings and risk weightings must undergo a thorough process of review and revision. No security or instrument on the planet should have a zero risk weighting.

We were able in the Recovery Act to get a program where we increased our loan guarantees to 90 percent. Because we had that program, a bank wouldn't have to take that much risk.

No matter how good a deal sounds, if your name goes on the bottom line, you need to understand it and be sure you'll be able to pay. You are responsible for yourself forever. Forever.

Raising minimum capital requirements [for banks] is expensive. But it is safe.

A credit derivative, at its core, is actually a very simple concept... The simplest way to think of a credit derivative is it is analogous to insurance against the risk of a credit default by your counterparty, your business counterpart.

I'm especially baffled by the idea of taking insurance against a U.S. default. If America defaults, we're talking about a chaotic world - Mad Max, more or less - in which case, who imagines that insurance claims will be honored?

A credit default swap was confusing mainly because it wasn't really a swap at all. It was an insurance policy, typically on a corporate bond, with semiannual premium payments and a fixed term.

The concept of insurance is not to share risk but to avoid risk.

Societies' abilities to cope with the unknown depend on the flexibility of their institutions and individuals, and on their capacity to experiment freely with alternative forms of adaptation to the risks which threaten them.

The trade of insurance gives great security to the fortunes of private people, and by dividing among a great many that loss which would ruin an individual, makes it fall light and easy upon the whole society.

When you have less risk, you have more fun. You can take risks. It's much easier to take risks when there's less money on the line.

A pre-nup is an insurance policy or, in brokerage terms, a short hedge - meant to mitigate a high-risk investment. It safeguards the love-struck from their own poor judgment of character.

You want banks to take some risk, but intelligent risk.

When you read that UBS did not even view parts of its mortgage portfolio as having market risk, it becomes very obvious that a number of firms were not dotting the i's and crossing the t's when it comes to risk management.

We have to provide more visibility, more certainty to the investors and reduce the cost of failure.

The national framework of social insurance - social security, unemployment and disability benefits, work programs, and workers' compensation - protected citizens from the kinds of risks that private markets couldn't or wouldn't insure.

It's extremely important for our banks to have more capital, higher quality capital.

Large credit guarantees also impede optimal allocation of financial resources and increase moral hazard.

The best companies with the strongest credit ratings borrow like the United States: on a non-prioritized basis. This means that in the event of a default, all of their debts are of equal priority because lenders and creditors believe default is highly unlikely. And they spend considerable effort maintaining this status.

I think the most important thing to understand about credit derivatives and their use at JPMorgan is they served a number of different purposes. First and foremost, they were a tool which initially was seen as being useful in managing the bank's own risk management challenges.

Credit-default swaps remedied the problem of open-ended risk for me. If I bought a credit-default swap, my downside was defined and certain, and the upside was many multiples of it.

I'm totally comfortable with taking some risk, but as long as it's doctrinated in something that makes sense.

If a division becomes insolvent, the credit markets' reaction to that is immediate - regardless of what period of time you think you have to remedy.