The dog in the night time: Difference between revisions

**LTCM: reliance on Black Scholes notwithstanding it's failure to manage tail events

**WireCard: BaFin not able to believe that this could be corporate fraud when "mendacious short-selling" by "locust" hedge funds - aided and abetted by, ahh, investigative FT journalists - fit the BaFin's regulatory world view and seemed a better story.

*'''Sleepy backwater''': It’s a boring and unglamorous part of the operational network. No one’s taking any risks there: [[Barclays Programme Limit]], [[Excess margin]] return in [[Archegos]], [[Libor]], Kerviel, Abodolo.

:*Juniorisation: Specialisation/siloisation/jujniorisation of key risk personnel: miss emergent risks between functions, not understand bigger picture; not understand risks at all. Emphasis of form over substance: [[Playbook]] as a substitute for comprehension.  

:*'''Misaligned incentives''': financial reporting as a profit centre (Enron)

==Correlation risks==