--- VC Roger Portnoy quoted in "
Silo but deadly", The Economist, December 5th 2009, on the role of IT systems in the financial crisis.
“Banks had lots of tools to create leverage, but not many to manage risk,” says Roger Portnoy of Daylight Venture Partners, a venture-capital firm that invests in risk-management start-ups.
The article goes further to report that some think IT played a more fundamental role in the crisis:
"Because things are so interconnected, largely thanks to technology, a problem in one part of the system can quickly lead to problems elsewhere. The global financial markets have evolved over the years into an inherently unstable network, says Till Guldimann, a strategist at SunGard, a software and IT services firm. The rapid unwinding of positions by ultra-fast quantitative-trading programs at the start of the credit crunch in August 2007 is one example of this cascading effect."
... though it may go deeper still:
"Many banks have become too complex to be managed properly, says Glenn Woodcock, a director at Andromeda Capital Management and a former head of credit-risk infrastructure at RBS. IT alone cannot fix that problem for them."
