The current financial crisis took nearly everyone — including professional risk managers — by surprise. When housing prices began to fall in the first half of 2006, the decline triggered a chain reaction few risk experts anticipated.

Indeed, in a recent lecture on the financial crisis, Dr. Christopher Culp, adjunct professor of finance at the University of Chicago and senior advisor at consulting firm Compass Lexecon, admitted that a large portion of his own assets were tied up in vulnerable markets — a certificate of deposit from IndyMac Bank, which failed in July 2008, and auction- rate securities, a market that froze in early 2008.