RADFORD -- How modern business balances the need to manage risk and generate profit was the focus of remarks shared by Keith Shields during the keynote presentation he made as part of the 2009 BB&T Global Capitalism Symposium held on Friday, October 30 at Radford University.

Shields, currently the senior statistician and analytic development lead for Marketing Associates in Detroit, MI, reflected on his experience managing the credit portfolios of Ford Motor Credit Company (FMCC) and Credit Assistance Corporation (CAC) to share some “lessons-learned” with students and faculty in his presentation titled, "Balancing Capitalistic Urges with Effective Consumer Risk Management in the Automotive Finance Industry.”

Shields’ presentation was part of the 2009 Global Capitalism Symposium, hosted by BB&T and the RU College of Business and Economics (COBE), to stimulate thought and discussion about capitalism, the tenets of free enterprise and the best practices of successful organizations. He also joined the COBE Advisory Council, leadership team and guests at a COBE dinner Thursday in Roanoke and was featured speaker at luncheon on campus for RU students, alumni and guests on Friday, at which he and representatives from BB&T were welcomed to RU by President Penelope W. Kyle.

“Establishing the likelihood of unfortunate events that result in repossession, foreclosure or charge-off is the essence of risk management,” said Shields. “And developing the statistical models that can help make profits and manage risk at the same time is how I and others in risk management spend our careers.“

In a presentation rich with references to the October 2008 credit crisis and ensuing economic problems, Shields cited the role that risk management plays as a counterbalance to the drive for profit that underlies the capitalist system.

“The mortgage industry’s dismissal of risk is largely responsible for where we are today . . . in a deep recession,” said Shields. He said the mortgage crisis was an example of the value risk managers bring to corporate decision-making. In the mortgage industry, he said, the industry’s quest for better sales and subsequent inaccurate assessment of the value of housing in the event of failure overrode its aversion to risk.

Shields also shared an insider’s look at consumer credit risks, explaining the core concepts of “severity,” “securitization” and a detailed explanation of the FICO, or individual credit score. According to Shields, an individuals’ credit score is based upon four factors: past bill-paying, revolving credit utilization, inquiries about an individual’s score and recent open trade lines.

“Keith’s perspective and experience provided us a valuable insight into today’s challenging business world on both the global and individual levels,” said Dr. Faye Gilbert, COBE dean. “His explanation of the relationship between risk management and capitalism was unique and we thank BB&T for making this valuable experience possible.”