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{{a|risk|}} | {{a|risk|}} | ||
:“''[[Policy]] is organisational scar tissue''” — {{author|Jason Fried}} | |||
===The nature of {{risk|risk}}=== | ===The nature of {{risk|risk}}=== | ||
The real risks are the [[black swan]]s: risks that | The real risks are the [[black swan]]s: risks that we don’t recognise as risks ''until they happen''. All significant market dislocations have come from blind spots. [[Known known]]s – about which firms naturally obsess, are not generally risks at all, precisely because they are [[known known]]s and are properly identified, managed and controlled. [[Black swans]], after they happen, cease to be [[black swan]]s. | ||
[[Black swans]], after they happen, cease to be [[black swan]]s. | |||
Our constitutional insistence<ref>''[[Stare decisis]]'', anyone?</ref> in reviewing the tape for PAST PERFORMANCE means we obsess about risks in stables from which horses have already bolted. Eg (okay this is my hobby horse) [[close out netting]]. ''Real'' risks [[unknown unknown]]s won’t cleave to the organisational structure, much less the firm’s own [[risk taxonomy]] or division of responsibility for risk management. These things of necessarily, which is based on stables from which horses have already bolted. Therefore [[unknown unknown]]s will tend present across non-contiguous areas of risk management – the same risk might be partly legal, partly credit, partly market risk. Each in isolation may be containable, but combined effect less so. | Our constitutional insistence<ref>''[[Stare decisis]]'', anyone?</ref> in reviewing the tape for PAST PERFORMANCE means we obsess about risks in stables from which horses have already bolted. Eg (okay this is my hobby horse) [[close out netting]]. ''Real'' risks [[unknown unknown]]s won’t cleave to the organisational structure, much less the firm’s own [[risk taxonomy]] or division of responsibility for risk management. These things of necessarily, which is based on stables from which horses have already bolted. Therefore [[unknown unknown]]s will tend present across non-contiguous areas of risk management – the same risk might be partly legal, partly credit, partly market risk. Each in isolation may be containable, but combined effect less so. | ||