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Writer's pictureMeurig Chapman

Whataboutism in Credit Risk Management: A dangerous distraction

In credit risk management, clarity and focus are paramount, but a common logical fallacy known as “whataboutism” can derail productive discussions and hinder effective risk assessment. By recognising and addressing whataboutism, we can ensure that our risk assessments remain accurate, our discussions productive, and our strategies effective. 


Clear thinking and focused analysis are essential in credit risk management. However, a common logical fallacy known as "whataboutism" can derail productive discussions and hinder effective risk assessment. At Happy Prime Risk Consultancy, we've observed this phenomenon creeping into credit risk conversations more frequently. Let's explore what whataboutism is, how it manifests in credit risk contexts, and why it's crucial to recognise and avoid this pitfall.


What is Whataboutism?

Whataboutism is a rhetorical device that attempts to discredit an opponent's position by deflecting criticism back without directly addressing the original issue. It's often employed to distract from the topic at hand by bringing up unrelated or tangentially related points.


Whataboutism in credit risk discussions

In credit risk management, whataboutism can take various forms:


  • Comparison to past performance: "What about our stellar performance last quarter? Why focus on this small uptick in defaults?"

  • Industry benchmarking: "What about Company X? Their default rates are much higher, so we're doing fine."

  • Economic context: "What about the overall economic downturn? It's not our fault that defaults are rising."

  • Risk type shifting: "Why worry about credit risk when operational risk is a much bigger concern right now?"


The dangers of Whataboutism in credit risk

Engaging in whataboutism can lead to several negative outcomes:


  • Overlooking real issues: By deflecting attention, genuine risk factors may be ignored or underestimated.

  • Complacency: Comparing to worse performers can create a false sense of security.

  • Missed opportunities: Focusing on unrelated issues can prevent the identification of areas for improvement.

  • Ineffective risk management: Whataboutism can lead to a reactive rather than proactive approach to risk.


How to counter Whataboutism

  • Stay focused: Keep discussions centered on the specific risk factors at hand.

  • Acknowledge, then redirect: Briefly address the "what about" point, then steer the conversation back to the main issue.

  • Use data: Rely on concrete data and risk metrics to ground discussions in reality.

  • Promote a culture of accountability: Encourage team members to take ownership of risks rather than deflecting.


In credit risk management, clarity and focus are paramount. By recognising and addressing whataboutism, we can ensure that our risk assessments remain accurate, our discussions productive, and our strategies effective. At Happy Prime Risk Consultancy, we're committed to helping our clients navigate these challenges and maintain a clear-eyed view of their risk landscape. Remember, in the world of credit risk, the most dangerous phrase might just be "Yeah, but what about..."

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