TALK TO BANKERS a lot and, after a while, you realize that what they don’t say is usually much more important than what they do say. Ask about their exposures to a certain class of risk – interest rate risk, say, or credit risk – and bankers will likely talk a lot about portfolio diversification, balanced long and short positions, hedges. They probably won’t mention what they’re actually worrying about themselves – being massively long volatility, say, or heavily exposed to basis risk.
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