The DeliveryDemon was interested to see some risk management being discussed in the US Treasury.
The US bank bailout includes the setting up of a public-private partnership to buy up toxic assets. As this Reuters article http://tinyurl.com/carurp explains:
- The cost risk to taxpayers outweighs the potential for benefits
- Conflicts of interest have been identified and recognised as a source of risk
- The scheme is inherently vulnerable to fraud, money laundering and other forms of abuse
- The ‘public’ element of the public-private partnership dilutes the risk for the private element, increasing the likelihood of a high risk approach to managing the overall funds
What is surprising is that these risks are being so publicly and simply stated. The early days of most public-private partnerships are normally wreathed in a mist of bonhomie as each party strives to protect and enhance its relationship with the other party. Reservations are rarely made public.
The DeliveryDemon will be interested to see how strongly this risk management and transparency is followed through. And whether the UK takes a lead from the US when it comes to acknowledging and managing the risks associated with the UK government’s bank bailouts.