Protecting yourself against true black swans is the art of the possible, not the probable
Just because we can't measure op risk accurately doesn't mean we should give up, argues Peter Sime
After 16 years as our risk analysis columnist, David Rowe looks back at a recurring challenge
Early warning signs can provide vital clues to firms with ‘feet of clay’
Profiting from disaster
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
Banks should abandon modern portfolio theory as it does not capture unexpected rare events, according to Nassim Nicholas Taleb, author of the risk management book The Black Swan .
Scarce data is a well-recognised problem for the assessment of operational risk. In such circumstances, David Rowe argues, it is necessary to blend professional judgement with the available data. In doing so, however, it is crucial to counter some well…