The devil is not in the detail. The devil is the detail: Difference between revisions

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The devil is not in the detail. The devil is the detail (view source)

Revision as of 14:51, 13 March 2022

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Of course, the [[boilerplate]] is pretty monstrous, too.
Of course, the [[boilerplate]] is pretty monstrous, too.


=== Make way, I’m a lawyer ===
On this commonplace is much of the [[Magic circle law firm|magic circle]]’s patter premised: to give them credit, they are ably aided in it by their [[In-house lawyer|in-house clients]], many of them refugees of the same brotherhood, and whose livelihoods are guaranteed by the same presumption.  
On this commonplace is much of the [[Magic circle law firm|magic circle]]’s patter premised: to give them credit, they are ably aided in it by their [[In-house lawyer|in-house clients]], many of them refugees of the same brotherhood, and whose livelihoods are guaranteed by the same presumption.  


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The regulators replied, “well, if you can’t explain the big picture risks in a single page, the product can’t be suitable for the general public, can it?”  
The regulators replied, “well, if you can’t explain the big picture risks in a single page, the product can’t be suitable for the general public, can it?”  


This the law-firms found hard to contradict. KIID become law. But the eighty-page prospectus remains — and from a liability perspective, governs — even though no-one can even pretend that anyone reads them any more.
=== The essence is of the essence. ===
That our contracts must at some level, be able to be reduced to a fundamental essence isn’t just for [[Ultimate client|gentle pensioners]] dandling grandchildren on their knees. The neurotic particularisation of risks that are, basically generic, feathers the nests of many subject matter experts. Even sophisticated financial institutions — ''especially'' sophisticated financial institutions — need to easily reduce their contracts to simple fundamental precepts, because that is how they risk manage them: there is no machine, and certainly no human being, in the bowels of an investment bank that is constantly reading its portfolio of {{isdama}}s to ensure every letter is complied with, every implicit buried option exploited. These contracts are reduced to a few key parameters: the tail risks are buried, filed away, to be dealt with by the legal eagles in the unpleasant event that they should arise.<ref>Come to think of it, it is a wonder there ''isn’t'' a squadron of waxen, hairless drones buried in some call centre in Bucharest rifling through that mountain of documents manually covering off that exact risk. It would make a great subplot for an [[Opco Boone]] adventure, in fact.</ref>
That our contracts must at some level, be able to be reduced to a fundamental essence isn’t just for [[Ultimate client|gentle pensioners]] dandling grandchildren on their knees. The neurotic particularisation of risks that are, basically generic, feathers the nests of many subject matter experts. Even sophisticated financial institutions — ''especially'' sophisticated financial institutions — need to easily reduce their contracts to simple fundamental precepts, because that is how they risk manage them: there is no machine, and certainly no human being, in the bowels of an investment bank that is constantly reading its portfolio of {{isdama}}s to ensure every letter is complied with, every implicit buried option exploited. These contracts are reduced to a few key parameters: the tail risks are buried, filed away, to be dealt with by the legal eagles in the unpleasant event that they should arise.<ref>Come to think of it, it is a wonder there ''isn’t'' a squadron of waxen, hairless drones buried in some call centre in Bucharest rifling through that mountain of documents manually covering off that exact risk. It would make a great subplot for an [[Opco Boone]] adventure, in fact.</ref>


This extra detail is, therefore heft: to the extent it confers optionality, it is optionality the organisation knows nothing about — the proverbial [[unknown known]] — or it is a put or call the organisation has sold that it is not managing in its books. We nod along and hope that, whatever happens it isn’t significant.
This extra detail is, therefore ''heft'': to the extent it confers optionality, it is optionality the organisation knows nothing about and is in any case in no position to exploit; if it ''grants'' optionality, it is a risk the organisation has sold but is not managing in its books. In either case, the proverbial [[unknown known]]: we nod along and hope that, whatever happens it isn’t significant.


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