A top member of Reuters' risk management unit urged those in his profession not to use "incomprehensible'' jargon when preparing reports for higher-ups.

Gabriel Bousbib, vice president of the risk management unit of Reuters America Inc., said: "Risk managers use incomprehensible acronyms. Top management, more often than not, have limited understanding of what is truly going on.

"The reports prepared for management are also incomprehensible and do not yield any meaningful and actionable information.'' Mr. Bousbib was speaking at the Bermuda Infoworld '96 exhibition, a two-day event presented by Reuters, which ended Friday, primarily to display the agency's services and new information systems.

He said financial institutions' risk managers often left top management in the dark.

Mr. Bousbib said managers needed to know the risks a firm currently faced, and if they were market, credit or operational in nature. Managers needed to know the market scenarios that could create huge losses for the firm.

The challenge was for risk managers to give top brass risk management information in a "layered'' format, he said, so critical information was not drowned in a sea of minor detail.

Systems needed to be in place to estimate losses for specific scenarios of unusual losses which might effect the firm's portfolio, in addition to value-at-risk figures which provide an average risk exposure, he added.

Mr. Bousbib also advised firms to have risk managers who were close to the traders and position-takers -- in both proximity and personality.

"People putting the firm's capital at risk should not view the risk manager only as a policeman and controller,'' he said. "They should also view them as a resource who can help them improve the risk return profile of their strategies.'' He also pointed out billion-dollar losses by Daiwa and Barings banks stemmed from rogue traders who controlled both back office and front office operations. And he warned against having back office staff members so junior no one listened when they spotted a problem.