Warren Buffet memorably wrote: "You only find out who is swimming naked when the tide goes out". He wastalking about the ability of reinsurers to pay out on a vast catastrophe-related insurance loss in an unfavourable economic environment. Yet his words could just as easily be applied in the context of the Madoff and Stanford scandals. The economic tide has rapidly receded and many assumed to be suitably attired have been embarrassingly exposed.

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Richard Prior is Group Deputy Chief Executive of The Risk Advisory Group. Richard Prior has provided advice to numerous companies on the management and mitigation of risk associated with investment in Russia and Eastern Europe, and in the management and resolution of problems and disputes.