Excerpt
The Rise of Risky Derivatives: Chief Risk Officers, CEOs, and Fund Managers. Frank Dobbin, November 18, 2016, Paper, "At turn of the century, regulators introduced policies to control bank risk-taking. Many banks appointed chief risk officers (CROs), yet bank holdings of new, complex and untested financial derivatives subsequently soared. Institutionalists suggest that firms respond to regulations by appointing compliance experts, who sometimes exaggerate legal requirements. We propose a more nuanced institutional theory of expert interests, and highlight effects of other powerful groups. Rather than overstating what the law required, risk experts sought to cement their role in shareholder-value management with compliance strategies that they also marketed as maximizing risk-adjusted returns."