November 13th, 2012, 11:28 pm
I have several books on risk management:Fundamentals of Futures and Options Markets - HullManaging Financial Risk - SmithsonValue at Risk - JorionNot to mention the latest FRM designation handbook.These books are very good at telling you what risk is, how to measure it, report it, and they give you some instruments and examples of how to minimize it. What they DON'T do is give you a good explanation of what to DO with all this information. In my mind a risk management system is a set of tools that can be turned into a decision engine. Do this under these circumstances. If VaR is x purchase m equity index puts. I'm not really finding anything like that. That suggest one of two things:1. This book doesn't exist and you have to learn it by trial and error (or go to work in some company's risk department).2. I have no idea what a risk management system actually is.Are risk management systems nothing more than a set of policies? Does this theoretical book exist and I'm just not finding it?