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Nassim Nicholas Taleb's blog, an inspiring read | Incerto

Tuesday, January 31, 2012

Heat Map Distortion

For most risk systems one big selling point is the heat map. It's tidy, it's colorful and in a macabre kind of way, it really energizes management to stare in ore at risks registered in the red zone. For the consultant it is a dream come true and the more they find wrong with a business, the more valuable they seem to become.

Worthy or not, traditional heat maps distort risk reality, they squeeze risk into a two dimensional perspective that makes the reporting process itself as dangerous as it is useful.

Monday, January 23, 2012

1+1 doesn't equal 2

In the world of risk, statistics, finance and many other fields of endeavour, 1+1 does not equal 2.

It's a little bit complicated but as 1+1 does not equal 2 in the realm of risk and while executives believe that 2 is the answer, our banking system will inevitably continue to fail us.

Wednesday, January 18, 2012

Changing the way we educate bankers

In the next five years the world of traditional banking is going to need to adapt in more ways than we can possibly imagine if it is to survive. These changes are likely to be driven from external factors, that is obvious. Recently however, internal catalysts seem to be appearing in the market that may question the very way these institutions function.

In this post we look at how some banks are starting to rethink their training environments to meet tomorrows banking challenges.

Monday, January 16, 2012

Is enterprise risk a journey or a destination?

A couple of days ago a customer asked me; is Enterprise Risk Management the end game in the world of risk? 

After reading a recent question on an ERM Linked-in forum, which goes something like this: "Is enterprise risk a journey or a destination?" I have been encouraged to write briefly on this subject here.
So then, is Enterprise Risk Management a journey or a destination?

Tuesday, January 3, 2012

China's Reserve Ratio Tactic

As last year drew to a close, the Peoples Bank of China cut the reserve requirement for local banks in an effort to swiftly ease funding liquidity conditions in the country.

In this post, we look at this tactic and why the central bank is doing this.