Looking for Risk in All the Wrong Places
26 July 2009
By Dr. Gregory Hamm with former NERA Senior Vice President Dr. Adam Borison
This paper points out key shortcomings of traditional risk management that are associated with corporate collapse, and suggests how those shortcomings can be addressed by adopting an alternative or Bayesian perspective. These observations are organized into three categories: the nature of risk itself, the nature of risk assessment, and the nature of risk management. Importantly, there are no new discoveries here. The ideas here are well-established and documented. However, they appear not to have penetrated the risk management field significantly to date.
