Federico Carrone
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risk models
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The Edge of Chaos
When Risk Models Create Risk
The last essay said the tail is too hard to measure. Jón Daníelsson goes one step further: in finance, the measurement itself changes the thing measured. When everyone uses the same risk model, the model becomes a synchronization device. The answer is a system designed to survive without everyone trusting the same number.
Jun 6, 2025
· 12 min