Yeah, but the "measure of recklessness" needs to go beyond just value at risk and portfolio sensitivities. Those things can be gamed by clever people and risk c

Yeah, but the "measure of recklessness" needs to go beyond just value at risk and portfolio sensitivities. Those things can be gamed by clever people and risk can be easily hidden. Unfortunately, most risk managers I knew barely understood the theory enough to identify the hidden risks in the books they oversaw. Most even struggled to get the right data out of the systems to do their jobs properly! You do make a valid point - if the recklessness somehow pays off, you're a hero (eg. Paulson).