Looking at Black Swans

In the second of a four-part series on the development of risk management, David Rowe considers the phenomenon of high-impact events, or Black Swans

In 2004, I wrote a column entitled Op Risk and Black Swans (Risk September 2004, page 114). I had stumbled on to Nassim Nicholas Taleb’s musing about extreme events on the web two-and-a-half years before his book, The Black Swan, was published.

It was immediately clear to me he had found a far better hook for driving home the importance of extreme events than we risk managers had done up to that point. By assembling colourful examples, some based on stressful personal experience, and weaving an