Greek Unknown

By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.

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Newspapers and political economic sites are currently filled with articles on the “Greek Unknown”.  It is true that the situation in Greece puts the European, and in fact the global economic community into uncharted territory.  However this is always the case.  Each new day, brings uncharted risks and uncertainties – no matter how mundane the business at hand may be.  It isn’t necessarily the Greek Unknown, but the General Unknown that makes business and risk management so interesting.

Data

By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.

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Data is a tool for risk management, but data is not risk management.  This simple fact is often lost in the current environment of risk management.  If the risk management department is mainly a function for collecting data then something is seriously wrong.  Risk management is the interpretation of data; the decisions of what data is necessary; the decisions about what data to ignore; the management of things that data cannot measure.  Simply because one has a hammer does not mean that a house gets built.  Likewise, simply because one has a massive collection of risk data does not mean that risk management is being practiced.

Useful and Accurate

By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.

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Management is not a pure science, nor is risk management.  However we often like to fool ourselves and believe that management is a science.  This leads to a desire to be accurate; accurate in our measurements and accurate in our forecasts.  However would you rather be accurate or useful?  The two are most definitely not the same.