Description
Book SynopsisIntroduces a more realistic and holistic framework called KuU - the Known, the unknown, and the Unknowable - that enables one to conceptualize the different kinds of financial risks and design effective strategies for managing them.
Trade ReviewWinner of the 2012 Kulp-Wright Book Award, American Risk and Insurance Association Finalist for the 2010 Paul A. Samuelson Award, TIAA-CREF "It is a bold book, tackling both theory and practice and spanning the worlds of (among others) banking, insurance, real estate, and investment. It is also utterly engrossing... Although this book is most obviously addressed to risk managers and regulators, I think it should be read by every intellectually curious person with skin in the financial game. If the investor or trader doesn't come away with at least one or two ideas of practical importance to his financial life, he is a 'sleepreader.'"--Brenda Jubin, Reading the Markets blog "Peppered with anecdotes and prominent examples, the book never abandons the practical side of its topic. It will be helpful for readers interested in only specific subtopics that each article is a stand-alone piece. I recommend this book to a wide audience: academics and practitioners, of course, but even people who are not directly involved in the financial sector, but are interested in it, will find it definitely worth their time."--Tobias Nigbur, Financial Markets and Portfolio Management
Table of ContentsPreface vii Chapter 1: Introduction by Francis X. Diebold, Neil A. Doherty, and Richard J. Herring 1 Chapter 2: Risk: A Decision Maker's Perspective by Sir Clive W. J. Granger 31 Chapter 3: Mild vs. Wild Randomness: Focusing on Those Risks That Matter by Benoit B. Mandelbrot and Nassim Nicholas Taleb 47 Chapter 4: The Term Structure of Risk, the Role of Known and Unknown Risks, and Nonstationary Distributions by Riccardo Colacito and Robert F. Engle 59 Chapter 5: Crisis and Noncrisis Risk in Financial Markets: A Unified Approach to Risk Management by Robert H. Litzenberger and David M. Modest 74 Chapter 6: What We Know, Don't Know, and Can't Know about Bank Risk: A View from the Trenches by Andrew Kuritzkes and Til Schuermann 103 Chapter 7: Real Estate through the Ages: The Known, the Unknown, and the Unknowable by Ashok Bardhan and Robert H. Edelstein 145 Chapter 8: Reflections on Decision-making under Uncertainty by Paul R. Kleindorfer 164 Chapter 9: O n the Role of Insurance Brokers in Resolving the Known, the Unknown, and the Unknowable by Neil A. Doherty and Alexander Muermann 194 Chapter 10: Insuring against Catastrophes by Howard Kunreuther and Mark V. Pauly 210 Chapter 11: Managing Increased Capital Markets Intensity: The Chief Financial Officer's Role in Navigating the Known, the Unknown, and the Unknowable by Charles N. Bralver and Daniel Borge 239 Chapter 12: The Role of Corporate Governance in Coping with Risk and Unknowns by Kenneth E. Scott 277 Chapter 13: Domestic Banking Problems by Charles A. E. Goodhart 286 Chapter 14: Crisis Management: The Known, The Unknown, and the Unknowable by Donald L. Kohn 296 Chapter 15: Investing in the Unknown and Unknowable by Richard J. Zeckhauser 304 List of Contributors 347 Index 359
