Enron Fall Spurred Risk Management Consolidation

In a world ravaged by financial scams such as Enron and Worldcom, risk management is the buzzword. Ironically, it is not just customers and investors who have to manage risks but companies themselves. In India, risk management in the energy sector is in its infancy but is expected to gain increasing currency due to deregulation.

Robert Sayer, partner, Ernst & Young, UK, who leads the energy team, speaks about the British experience in an interview with Hemangi Balse & S Ravindran.

What has been the impact of the collapse of Enron on the risk management business in the UK power sector?

 

Immediately after the Enron debacle we found that a lot of US trading companies were badly affected by downgrades. Most of them pulled out of the electricity trading market in the UK. What is left now are the big and original players.

There has also been consolidation in the market with two big German power companies have come in and bought two another companies