To people working in Risk Management

[pingu]

he used to?

yes... until he lost money for 3 or 4 years in a row and shut down. His partner opened a fund 4 years later and has been very successful.

 

[TehRaio]

yes... until he lost money for 3 or 4 years in a row and shut down. His partner opened a fund 4 years later and has been very successful.

so what was your point?
to be fair to him he's had "skin in the game" for most of his life.
he may be sound extremely arrogant but it's hard to take his credibility away from him.

 

[yetanotherquant]

Does he propose a better idea?

I don't remember whether Taleb himself express the idea that sometimes no tools are better than wrong tool but Pablo Triana, a big fan of Taleb and the author of a (controversal and repetitive but still interesting) book "Lecturing birds on flying" says approximately the following: "give a pilot no altimeter and he will look from the window. Give him broken altimeter and he will crash the plane".

From my point of view (and my experience as a risk manager) the main problem is not the absence of the "right" modeling tools.
Risk management usually can recognize the danger and warn about it.
The problem is that risk managers are considered as Spaßverderber (fun spoiler) and rarely heard by top management.

There is also a problem on (from?!) regulators' side:
"Regulators have reduced risk managers to box checkers, making sure they take every measure of risk and report it dutifully on extensive forms. It just consumes more and more staff, turning them into accountants and rotting brains.” - says John Breit, the former top risk manager at Merrill Lynch
(http://dealbook.nytimes.com/2013/04/03/uncovering-the-human-factor-in-risk-management-models/?_r=0)

 

[pingu]

John Breit is THE MAN!! Great guy.

 

[IntoDarkness]

some risk guy/gal at my place actually quantified his/her group's attribution by some balance sheet impact modeling. i heard they are now sharing a bigger pie of the profit... but not every risk group can do that...

 

[zyz]

some risk guy/gal at my place actually quantified his/her group's attribution by some balance sheet impact modeling. i heard they are now sharing a bigger pie of the profit... but not every risk group can do that...

This sounds really interesting. Can you explain how one can actually do that?

 

[random-quack]

Does he propose a better idea?

If I told you there's a cliff at the end of the road, would you keep driving until I propose to you a better road?

 

[Paul Lopez]

If I told you there's a cliff at the end of the road, would you keep driving until I propose to you a better road?

If you are Taleb I'd just keep driving.