Search
Search titles only
By:
Search titles only
By:
Forums
New posts
Search forums
What's new
New posts
Latest activity
Feedback
View Statistics
Members
Current visitors
Buy Sell Trade
WTB
Log in
Register
Search
Search titles only
By:
Search titles only
By:
New posts
Search forums
Menu
Install the app
Install
Reply to thread
Forums
The Social Lounge
General Talk
Technology Risks to EVM?
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Message
<blockquote data-quote="Neotheone" data-source="post: 2523097" data-attributes="member: 487"><p>Well, since not many people are actually willing to discuss the actual question, I might as well indulge especially as you mentioned risk.</p><p></p><p>From a risk-taking perspective, my view is that to keep organizations alive for decades, or centuries, you have to survive tail events over long run. Nations are (hopefully) supposed to survive tails for centuries, and technology will continue to emerge rapidly, hence I believe deeper questions need to be asked instead of just focusing on operational unlikelihood. On top of that, humans naturally cannot grasp tail risks because we have evolved by dealing with base case risks (things that usually happen). Hence, I'm usually interested in things of events that seem near impossible. With rapid emergent technology, we have already seen many past impossibles turning into everyday experience. I would actually not put anything in the impossible category, even if the probability of that event lies many standard deviations away from the mean.</p><p></p><p>I am sharing an example not because it is directly related, but more because it is an interesting story, and hopefully highlights how unlikely events are structurally ignored by even analytical organizations:</p><p></p><p>I used to once manage liquidity risk for a financial institution where failure could have systemic implications. Our models for regulatory compliance used to throw up a "good-looking" measure of risk based on assumptions of normality. It basically said that we had zero liquidity risk up to nearly 18 months as far as submissions to regulator was concerned. However, when a major unlikely liquidity event happened in 2018, after 3 days of reassessment, we had 21 days of liquidity left.</p><p></p><p>To state the big reason again: A risk assessor should think in terms of what can go wrong, and not be too comfortable based on reasons why it would not. That too even if he or she sounds like a broken record for a long time, and especially so if he/she is dealing with risks over the scale of centuries.</p></blockquote><p></p>
[QUOTE="Neotheone, post: 2523097, member: 487"] Well, since not many people are actually willing to discuss the actual question, I might as well indulge especially as you mentioned risk. From a risk-taking perspective, my view is that to keep organizations alive for decades, or centuries, you have to survive tail events over long run. Nations are (hopefully) supposed to survive tails for centuries, and technology will continue to emerge rapidly, hence I believe deeper questions need to be asked instead of just focusing on operational unlikelihood. On top of that, humans naturally cannot grasp tail risks because we have evolved by dealing with base case risks (things that usually happen). Hence, I'm usually interested in things of events that seem near impossible. With rapid emergent technology, we have already seen many past impossibles turning into everyday experience. I would actually not put anything in the impossible category, even if the probability of that event lies many standard deviations away from the mean. I am sharing an example not because it is directly related, but more because it is an interesting story, and hopefully highlights how unlikely events are structurally ignored by even analytical organizations: I used to once manage liquidity risk for a financial institution where failure could have systemic implications. Our models for regulatory compliance used to throw up a "good-looking" measure of risk based on assumptions of normality. It basically said that we had zero liquidity risk up to nearly 18 months as far as submissions to regulator was concerned. However, when a major unlikely liquidity event happened in 2018, after 3 days of reassessment, we had 21 days of liquidity left. To state the big reason again: A risk assessor should think in terms of what can go wrong, and not be too comfortable based on reasons why it would not. That too even if he or she sounds like a broken record for a long time, and especially so if he/she is dealing with risks over the scale of centuries. [/QUOTE]
Insert quotes…
Verification
Post reply
Forums
The Social Lounge
General Talk
Technology Risks to EVM?
Top
Bottom