Bank-Risk Yardstick Is a Blind Measure


How risky do you want your bank investments to be? Don’t laugh, it is a serious question.  These days, investors can adopt a buffet-style approach to bank risk. To get a sense of what is on offer, take a look at the table accompanying this column.

It is an attempt by Fitch Ratings to get an apples-to-apples comparison of banks’ “value-at-risk,” or VAR, the most common yardstick of trading risk. VAR is designed to measure the maximum trading losses faced by a bank in a single day.


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