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Don't say "oversight," say "supervision."

Don't say that: 

Oversight

Do say this: 

Supervision

Why?: 

The global financial crisis that was underpinned by bad lending decisions and economic mismanagement arose because of oversight by the US Federal Reserve when it failed in its obligations to undertake supervision.

The oversight was that exactly the same set of circumstances had arisen in the UK some years earlier. But Alan Greenspan's policy was to look at US data and only going back for a few years. We know this because he claimed that one of the reasons for the crisis was that the Fed's economists had data going back only 15 years. That missed the UK crisis by about five years.

"Oversight" means to overlook. This is not the same as to look over. To look over something is to pay attention to it. To overlook it means to ignore, fail to appreciate the significance of or entirely miss something.

The current trend towards talking about supervision (both internally within companies and externally by regulators) as "oversight" is therefore totally flawed.

Supervision is a function of management; oversight is a cause of mismanagement.

 


 

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