Black swan and Sovereign issuance: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Link with new Guide to risk management page & remove link to old Risk management page.)
 
imported>Doug Williamson
m (Spacing 20/8/13)
 
Line 1: Line 1:
''Risk management.''
1.  


An apparently unusual event of very high impact, particularly one which - before it happened - was believed in error to be highly improbable or even impossible.
''Euro zone''.


The use of the term in finance derives from the widespread historical (and erroneous) belief in the Northern hemisphere that black swans did not exist, in the period before the common occurrence of black swans in the Southern hemisphere had been reported in the North.
The currently prevailing arrangements in the Euro zone, under which individual countries issue their national debt separately and individually.


The concept was popularised in a 2007 book by Nassim Nicholas Taleb - "The Black Swan" - where he summarises the problem in risk management as "the confusion of absence of evidence of Black Swans (or something else) for evidence of absence of Black Swans (or something else)". 


In other words, that the existence of financial "black swans" tends to lead to the systematic under-assessment and understatement of financial risk.
2.
 
More broadly, direct borrowings by an individual country.




== See also ==
== See also ==
* [[Guide to risk management]]
* [[Common issuance]]
* [[Probability]]
* [[Issuance]]
* [[Sovereign]]

Revision as of 10:06, 20 August 2013

1.

Euro zone.

The currently prevailing arrangements in the Euro zone, under which individual countries issue their national debt separately and individually.


2.

More broadly, direct borrowings by an individual country.


See also