The decline of the financial domination of the Western empire.

Following the continuous decline in value of major publicly traded corporations, the International Actuarial Association announced the creation of a global risk management framework. The role of the framework is to improve financial performance and help prevent future financial crisis. They believe that actuarial methods can help manage uncertainty and mitigate the impact of risk.

This is a lesson the entire Western financial system can learn from the emerging economies. From Turkish Bankers to Saudis regulators, developing countries somehow had a better handle of  the predictable irrationality surrounding them.

In Davos, the most memorable moments weren’t the different solutions offered to handle the crisis, but the “beatdown” US financial gurus received from Russian, African and Mid-East participants who basically were arguing against the measures being currently advocated by Europeans and American policy makers. Sheikh Saleh Kamel Chairman of the General Council for Islamic Banks noted ” We didn’t make mistakes, the Americans did”. Ngozi Okonjo-Iweala the former Nigerian Minister of Finance, now Managing Director of the World Bank, rightfully indicates the reluctance of emerging economies to listen to the West when they couldn’t even follow the basic risk management philosophy.

Everywhere else, industry professionals are still baffled by the lack of regulatory oversight that allowed the leveraging and securitisation activities to go on without any regards to the fundamentals. So why can’t policy makers and managers from emerging markets be allowed to give advices to Western financial leaders who recently showcased the limit of their approach ?