|The Devil’s Advocate™|
Known known /nəʊn nəʊn/ (n.)
As famously articulated by Donald Rumsfeld, something that you know that you know. It is also known as “the stable from which your horse has bolted”, which your risk and legal and management teams will accordingly obsess about, until the last guy who was there when the horse bolted has finally retired. Whereupon the paradigm will reset and the known known will be demoted to an unknown known, if your organisation has a grip on history, or an unknown unknown, if it doesn’t.
Great example: The Glass-Steagall Act of 1932, hastily enacted to address the, in hindsight, face-slappingly obvious opportunity for perfidy presented by allowing a financial institution to use its customer deposits to capitalise its investment banking — in the vernacular, “casino banking” — operations. The banks ploughed mom-and-pop savings into pump-and-dump boiler-room schemes which, during the pumping phase, was just fine, but in the dumping phase, when the Dow fell off a cliff in 1929, led to bank runs, folks (largely moms and pops, and not bankers, by the way) throwing themselves off buildings and so on. Never again in our lifetime will we allow that, said they great and good of 1932, and so it proved.
Wikipedia puts it in uncharacteristically forthright (but basically fair) terms:
- The oligarchy of major U.S. financial sector firms succeeded in establishing a dogma of deregulation in American political circles and in using its considerable political influence in Congress to overturn key provisions of Glass-Steagall and to dismantle other major provisions of statutes and regulations that govern financial firms and the risks they may take. In 1999 Congress passed the Gramm–Leach–Bliley Act, also known as the Financial Services Modernization Act of 1999, to repeal them.
Anyhow, the point at which your legal department launches a global, multi-departmental, all-hands effort to taxonomise the risk your institution faces, or describe a complete service catalog of all the activities your legal eagles can be expected to do, is classic evidence of empty-stable inspection. But hey — it keeps folk busy and it makes for fantastic charts, so knock yourselves out!