'An Enormous Failure of Risk Management'

The world may be hot, flat, and crowded, but it is also curved. So says David Smick, an international financial consultant and the author of the new best-seller The World is Curved: Hidden Dangers to the Global Economy (Penguin Portfolio, 2008).

Smick's book provides a thorough analysis of how the current financial crisis developed and why it is a symptom of potentially more serious trouble (and you thought these past few weeks were tough).

Smick, the editor and publisher of the quarterly The International Economy, writes clearly and distills complex issues into straight talk. I caught up with him last week and asked him several questions about the crisis and its impact on businesses and finance executives outside the financial services sector.

Among other insights, Smick emphasized that CFOs outside of the banking sector "would be absolutely appalled at the risk management techniques of our largest financial institutions."

The article based on our discussion is available here.