Saturday, January 31, 2009

De-risking - New Financial Terminology

De-risking is the word of the moment. What does this word really mean? If you Google it you get about 1,680,000 references. Both Wikipedia and did not have anything for it. I imagine the SEC and Treasury may be using it but do not have a definition. So when the lawyers stand up in front of a judge what meaning will be ascribed? So if you are in the middle of litigation wouldn’t it be interesting if the word changes meaning on the way through. Talk about event risk, the English language morphing right in front of our eyes.

This is what I think it means but we could agree to disagree.

De-risk: The activity or series of activities which reduces or lowers risk in any given situation.