Bank Innovation is stranded.

Our offices are located on Broad Street, two blocks south of Wall Street in Downtown Manhattan, and for last night Broad Street was a part of New York Harbor. The street was completely inundated with seawater. Power is out in the neighborhood; our building closed for the foreseeable future. Bank Innovation is currently housed in our staff’s “home offices,” many of which are without power.

While this won’t stop us from reporting on banking innovation (Vodaphone seems to have taken a big step forward today in its efforts to roll out a mobile wallet, for example), this whole “frankenstorm” event gives us pause. My old grad school friend, Rob Cox, wrote last night of the lessons in risk management offered by the storm:

Like hurricanes and perfect storms, the only thing predictable about banking crises and financial panics is that they will definitely happen again. Any belief to the contrary creates a false sense of complacency into which arguments about reducing defenses – or in the case of banks, relaxing capital standards and regulations – find their most welcome reception. Indeed, strengthening banks’ buffers actually helps to make financial storms less likely.

In advance of Sandy’s march through Manhattan, thousands of sandbags have been stacked in front of the downtown headquarters of Goldman Sachs. It is a picture whose metaphorical value should not be lost on regulators, policymakers, shareholders and the bankers themselves: when the flood comes, there can never be too many sandbags, or capital, to prevent a wipeout.

Rob makes a valuable point, and I certainly don’t disagree with him. However, it is hard for me to think of such things at this time.

When a tree falls on the house of one of my colleagues — as it did last night — I can’t focus on the intricacies of risk management. And that is the real truth of risk management: it is to be considered and dissected and scrutinized before it needs to be considered and dissected and scrutinized. The decision on sandbags needed to be made before 14 feet of seawater flooded Goldman Sachs’s neighborhood last night. Risk management is more about “management” than “risk.” That’s something I realize all too clearly now.