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Research: Hiring Chief Risk Officers Led Banks to Take on Even More Risk

Research: Hiring Chief Risk Officers Led Banks to Take on Even More Risk

Risk taking by big U.S. banks exploded in the years leading up to the 2008 financial crisis, with disastrous consequences for American firms, markets, and households. Much of the added risk, of course, came in the form of complex, opaque financial instruments like derivatives, the “financial weapons of mass destruction” that played such a central role in the crisis and the panic that followed. But why did banks get in so deep with derivatives, particularly after Washington tried to crack down on risk with new laws and regulations in the early 2000s? In a recent study, published in the American Sociological Review, we trace the growth in bank risk taking to a surprising culprit: the rise of the chief risk officer (CRO). Many banks, it turns out, responded to new regulatory and reporting demands by appointing a CRO, as a way to show regulators and investors that they were serious about risk management. The popularity of this position skyrocketed after CROs (and the centralized enterprise-risk-management programs they oversaw) became the gold standard for compliance. In 2000 fewer than 1% of big banks had a CRO. By 2006 nearly one-quarter did.

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Can Chewing Gum Boost Your Golf Game?

Can Chewing Gum Boost Your Golf Game?

Jordan Spieth’s impromptu decision to chew his way through his first and second rounds at Royal Birkdale has sparked an unlikely debate On his way to a dramatic win for the ages at the British Open last week, Jordan Spieth did something else that was remarkable. He chewed an inordinate amount of gum on the course. Spieth’s impromptu decision to chew his way through his first and second rounds at Royal Birkdale sparked an unlikely debate about whether gum plays a role in sports performance. It became a wide-ranging discussion both on the Golf Channel broadcast and on social media. And it left most observers seemingly unsure what to make of it. Was this a meaningless quirk unrelated to Spieth’s victory? Or should pro shops around the world start pushing aside Titleists to clear a shelf for Trident? “I think mint has some sort of effect on nerves,” Spieth said, though he wasn’t sure that was true for him, since he said after his opening round that he still felt nervous.

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Tim and Eric Figure Out How to Do the Wrong Thing, Perfectly

Tim and Eric Figure Out How to Do the Wrong Thing, Perfectly

At the end of their live show currently touring the country, Tim Heidecker and Eric Wareheim — better known as Tim and Eric — leave the stage after introducing their final act, a third performer who comes off as a parody of a 1980s observational comic, his jokes drowned out by loud music.

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Jordan Spieth and Rory McIlroy, the Giants of the Modern Game

Jordan Spieth and Rory McIlroy, the Giants of the Modern Game

SOUTHPORT, England — Jordan Spieth is the kid in class who obtains the course syllabus over the summer so he can read all the textbooks before the start of the school year and who never turns down an extra-credit assignment. Rory McIlroy is the kid with the photographic memory who finishes his research papers the morning they are due and who makes acing tests look effortless.Each is riveting in his own way. Both have a strong stage presence, but neither pretends to be anything — starting with invulnerable — that he isn’t. “There’s a lot of roads to get there,” Spieth said Sunday night at the 146th British Open, regarding his success in majors. He was contrasting his low-stress final-round 70 at the 2015 Masters with his high-wire 69 on Sunday at Royal Birkdale, but he could have been talking about the approaches of the two players locked in perhaps the most compulsive contest in men’s golf.

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How to Survive a Lavish Wedding

How to Survive a Lavish Wedding

Like many a human who has reached a certain age, I’ve spent a lot of my adult life going to weddings. They’ve ranged from a beach in the Dominican Republic to City Hall to the traditionally formal evening event, complete with passed canapés, ice sculptures and sequined gowns. Before one of those ornate affairs, my date arrived clad in black jeans to pick me up. I spent most of the night feeling self-conscious that I’d brought along a guy who was less dressed up than the kitchen staff. As I would eventually learn, one of the key ways to survive a lavish wedding is to let the embarrassing moments slide off you like good caviar. Don’t keep apologizing to people. It only draws attention to the gaffe, and anyway, the sartorial choices of you and your date aren’t the point of the wedding.

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Advertisers Try to Avoid the Web’s Dark Side, From Fake News to Extremist Videos

Advertisers Try to Avoid the Web’s Dark Side, From Fake News to Extremist Videos

Marketers are reevaluating their approach to automated ad-buying and demanding more accountability. In February, Kieran Hannon, chief marketing officer of Belkin International Inc., noticed an odd tweet asking the electronics maker why it was advertising on Breitbart News Network, a right-wing website known for scorched-earth populism. A banner ad promoting the company’s new Linksys mesh router had appeared on the site, even though Breitbart wasn’t among the roughly 200 sites Belkin had preapproved for its ads. Mr. Hannon called his ad agency, which couldn’t explain the mix-up. “We still don’t know how that happened,” he said. Such headaches are becoming all too familiar for marketing executives, as they come to grips with the trade-offs inherent in automated advertising. Known as “programmatic” ad buying, it is now the way the vast majority of digital display ads are sold.

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The Joy of the Jump Rope

The Joy of the Jump Rope

A simple exercise routine borrowed from boxing turned out to be just what an executive needed to make fitness fun. What does a 10-year-old have in common with a pro boxer? Both jump rope with ease, says Grant Opperman. “Boxers, some of the fittest athletes in the world, work cardio, reflexes and coordination by performing an activity most of us did as children,” he says. “And even though it’s grueling, there’s also something really fun about jumping rope.” Mr. Opperman, the 52-year-old founder of the Microburst Group, a Bay Area communications and strategy consultancy, began his search for a sustainable workout in 1996. “I was 31 years old then, so I wasn’t feeling the effects of an unhealthy lifestyle, but in the span of a few years my pants size went from a 32 to a 34,” he says.

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How to Feed Your Summer Crowd Without Going Crazy

How to Feed Your Summer Crowd Without Going Crazy

I haven’t had a working oven for nearly a month now. (Mice chewed through some of the wires, which is a different story and not one I want you to think about right now.) This would be a problem for me even if I lived alone.But I cook nightly dinners for another adult and the four teenage girls in my so-called blended family, a modern moniker that seems to vaguely reference cake mix but in fact denotes a group of children of various ages and temperaments who have been brought together by outside forces to dine together with regularity.

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Oops! A Gallery Selfie Gone Wrong Causes $200,000 in Damage.

Oops! A Gallery Selfie Gone Wrong Causes $200,000 in Damage.

The Selfie No-No Hall of Fame may have found its Babe Ruth. Simon Birch, a British multimedia artist based in Hong Kong, has been displaying his latest immersive exhibition at the 14th Factory pop-up gallery in Los Angeles. In one room were placed a series of crowns on pedestals of varying heights — all very close to one another. They were the very definition of selfie bait. So it was perhaps no surprise that a woman two weeks ago would get a bit too close to the art and, mid-selfie, lose her balance, sending pedestals and crowns crashing in a cascading domino effect.

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Neighborhood Supermarkets Chase the ‘Slow Dollar’

Neighborhood Supermarkets Chase the ‘Slow Dollar’

Most local food retailers don’t try to beat national chains on price, but aim to offer better shopping. A Trader Joe’s outpost on Court Street in Brooklyn does a brisk business. When I moved to Brooklyn Heights this past spring, I was delighted by the Key Food around the corner on Montague Street. It’s a nice little neighborhood supermarket—newly renovated and well organized. There’s even a strange mannequin named Gregory greeting shoppers at the door, and a stuffed orangutan overseeing the bananas. But the prices! My grocery bills suddenly were 20% higher than I’d been paying at the Key Food I’d left behind in Cobble Hill, Brooklyn.

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