Kevin M. Blakely started as CEO of the Center City-based Risk Management Association just before the subprime-mortgage turbulence had graduated to crisis status.
In an interview in July 2007, he said that banks had "come a long way in developing new methods of modeling risk, but we haven't been through a major business cycle yet when these methods have been tested."
Well, now, we have. After the hundreds of billions spent on bank bailouts, you probably know how effective those methods were.
Many banks and other organizations were not investing in risk management the way that they should been, Blakely said yesterday.
And those computer models? "They've taken a real beating," he said. "But they're created by human beings and are based on assumptions made by human beings."
What got lost in the chase for revenues and profits was that human element. "We made models out to be the be-all and end-all of risk management. We lost sight of the human judgment needed and the subjective decisions that are necessary," he said.
Now a renewed emphasis on risk management is in vogue, and so are chief risk officers, such as Blakely, who'd spent more than a decade as one at KeyCorp in Cleveland.
On Wednesday, Huntington Bancshares Inc., of Columbus, Ohio, announced that Blakely would become its new chief risk officer in early July.
For this next hurrah, he can thank his long involvement in the small but influential Philadelphia nonprofit that he's run for nearly two years. Blakely, 58, had served as a board member of RMA from 2000 to 2002 with Stephen D. Steinour, the former CEO of Citizens Financial Group.
In January, Steinour became CEO of Huntington Bancshares, which tapped $1.4 billion in capital through the Treasury Department's Troubled Asset Relief Program last fall. Blakely said Steinour called him after Huntington's chief risk officer indicated he wanted to leave for family reasons.