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What to Do When Black Swans Invade
In these crazy days, it can sometimes seem like one-in-a-hundred-year events are happening every five years (of course, as long as the events are all different, there’s not necessarily…
When Covid Moves the Risk Goalposts
Imagine running-up to take a penalty, only for the goalposts to move just as you’re about to kick the ball. What if the ball was the capital you’re managing…
Three Investment Lessons From the COVID Crisis
Equities, bonds and cash. This is the holy trinity of assets where investment managers stash most of their money. They may have a bit of all three; they may…
How Fed Stress Tests Helped Prep the U.S. For COVID
They sent chills down the spines of every big bank CEO, forcing some of the most storied names on Wall Street to try multiple times before receiving a pass….
If You Don’t Like Surprises, Avoid Them
The past six months have been full of surprises, ranging from the coronavirus pandemic and lockdown, to massive government intervention and soaring stocks. Against this backdrop, one is almost tempted…
Herd Immunity: Why Stocks Keep Rising (Despite COVID-19)
Have the markets gone mad? After the COVID crash – prompted by the “Great Shutdown” rather than than the pandemic itself – markets have recovered their vim. As Bloomberg’s…
How to Make Fed Stress Tests Pandemic-Proof
Stale, confusing and little more than a compliance exercise designed to enable banks to continue paying dividends – that’s how Harvard professor and former Federal Reserve board member, Daniel K…
Wall Street’s Pandemic Stress Test
Totally outdated. That’s how the U.S. Federal Reserve must now feel about February’s bank stress tests – within weeks, the COVID-19 pandemic had rendered them useless. Of course, the…
Thought Predicting the Pandemic Was Hard? Try Predicting the Response
The precise timing and severity of a pandemic is impossible to predict: there is no Minority Report-style “pre-pandemic”, where genetically-blessed soothsayers see the future. But as we discussed in previous…
What’s in a Scenario?
Last week, we discussed how our algorithms factor in new, unprecedented scenarios, such as COVID-19. But which particular variables have the biggest impact on the overall risk scenario? This was a…
Predicting the Pandemic
Last month we wrote about the massive upheaval caused by the coronavirus pandemic, and how financial institutions must quickly find an effective way to measure unprecedented tail risks. The piece sparked…
COVID-19 Calls for New Risk Measure
Read our CEO’s article – COVID-19 Calls for New Risk Measures, which was published on April 3, 2020 in the GARP magazine