Henrique Costa

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I started this website some time ago with the aim of writing down the
expansion of my knowledge and experience in the area of financial risk
management. And also other things like programming with R, econometric
modeling and a little about *data science* and *machine learning*. So
I'm going to use this publication as a starting point, and start
discussing texts and examples applied to financial risks.

I am not going to give a general and complete description of what
financial risk is and its management processes, as this can be easily
found on sites like Wikipedia.

But risk, in the most basic sense, is the possibility that bad things
will happen. Humans have evolved to manage risks like wild animals do.
However, our awareness of risk is not always adequate for the modern
world.

Behavioral science shows that we rely too much on our instincts and
personal experience, as biases distort our thought processes.
Furthermore, even the way we frame risk decisions irrationally
influences our willingness to take risks.

Yet surprisingly sophisticated examples of risk management can be seen
early in history. In ancient times, merchants and their creditors shared
the risk by tying loan repayment to the safe arrival of shipments
through sea loans (i.e. combining loans with a type of insurance). [We
can see some references
here](https://risk-engineering.org/concept/history-of-insurance) and
[here too.](https://core.ac.uk/download/pdf/289933444.pdf)

The insurance contract separated from the loan contract as early as the
14th century in northern Italy, creating the first autonomous financial
risk transfer instrument. From the 17th century onwards, a more
methodical approach to the mathematics of risk can be traced. This was
followed by the development of exchange-based risk transfer, in the form
of agricultural futures contracts, in the 18th and 19th centuries. [Some
other references
here](https://www.jstor.org/stable/10.1086/ahr.111.2.307).

This methodical approach continued to evolve in the 20th century and
beyond, with major advances in financial theory in the 1950s; an
explosion in risk management markets from the 1970s onwards; and the
emergence of new instruments, such as cyber risk insurance, at the
beginning of the 21st century. **Risk management is an ancient art, but
a young science -- and an even younger profession**.

The way we think about risk is the biggest determinant of whether we
recognize risks, assess them appropriately, measure them using
appropriate risk metrics and manage them.

In the next publications I will bring introductory content that will
analyze risk definitions, the classic risk management process, the main
types of risk and the tools used to track risks and make decisions.

Most risk management disasters are caused by the failure to recognize
and/or adequately address one or more of these fundamental elements, not
by the failure of some sophisticated risk management technique.
Century-old financial institutions have gone bankrupt because their risk
management procedures ignored a certain type of risk, misunderstood the
links between risks, or did not follow the classic steps of the risk
management process. As we recently observed the failure of some
financial institutions, both in Brazil and around the world.

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Costa, Henrique. 2023. "A Few Words about Risk Management." August 27,
2023. <https://doi.org/10.59350/51paw-dza08>.
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I started this website some time ago with the aim of writing down the expansion of my knowledge and experience in the area of financial risk management. And also other things like programming with R, econometric modeling and a little about
<em>
 data science
</em>
and
<em>
 machine learning
</em>
. So I’m going to use this publication as a starting point, and start discussing texts and examples applied to financial risks.

A few words about risk management

Anita Eppelin

Im Mai 2023 erschien die Open-Access-Monografie „[Homo remotus -- Kritik
zur Führung auf Distanz](https://doi.org/10.15771/1736){target="_blank"
rel="noopener"}" von [Markus Karp, Professor für öffentliche Verwaltung
und Wissensmanagement an der Technischen Hochschule
Wildau](https://www.th-wildau.de/personen/markus-karp/){target="_blank"
rel="noopener"}.

![Cover image of the open access book \"Homo remotus - Kritik zur
Führung auf Distanz\" vom Markus Karp, TH
Wildau](https://open-access-brandenburg.de/wp-content/uploads/2023/05/Cover_Karp_InShot_20230426_143815176-640x913.jpg){.wp-image-6546
.size-medium .alignleft loading="lazy" decoding="async" width="210"
height="300"
srcset="https://open-access-brandenburg.de/wp-content/uploads/2023/05/Cover_Karp_InShot_20230426_143815176-640x913.jpg 640w, https://open-access-brandenburg.de/wp-content/uploads/2023/05/Cover_Karp_InShot_20230426_143815176-1280x1826.jpg 1280w, https://open-access-brandenburg.de/wp-content/uploads/2023/05/Cover_Karp_InShot_20230426_143815176-768x1096.jpg 768w, https://open-access-brandenburg.de/wp-content/uploads/2023/05/Cover_Karp_InShot_20230426_143815176-1077x1536.jpg 1077w, https://open-access-brandenburg.de/wp-content/uploads/2023/05/Cover_Karp_InShot_20230426_143815176.jpg 1341w"
sizes="(max-width: 210px) 100vw, 210px"}Im Buch reflektiert der Autor
die Auswirkungen der technischen Vernetzung und der sich verändernden
Arbeitswelt auf unser tägliches Leben. Durch die rasante Entwicklung
gesellschaftlicher Interaktionen und die Nutzung moderner Technologien
hat sich in den letzten Jahren eine neue Form der Arbeitsflexibilität
und -mobilität etabliert. Insbesondere die Corona-Pandemie hat die
Nutzung von Distanzinteraktionen verstärkt. Karp betrachtet die
Auswirkungen dieser Veränderungen auf wirtschaftliche, soziale,
psychische, rechtliche und kulturelle Bedingungen. „Homo remotus" lädt
dazu ein, über die Chancen und Herausforderungen der Führung auf Distanz
nachzudenken und die Potenziale sowie Grenzen dieser neuen
Arbeitsrealität zu hinterfragen.

Die Monografie wurde aus Mitteln des [Publikationsfonds für
Open-Access-Monografien des Landes
Brandenburg](https://open-access-brandenburg.de/fonds/) gefördert. 

Markus Karp: *Homo remotus -- Kritik zur Führung auf Distanz.*
Magdeburg: Kompakt Media, 2023.
[https://doi.org/10.15771/1736](https://doi.org/10.15771/1736){target="_blank"
rel="noopener"}


Im Mai 2023 erschien die Open-Access-Monografie „Homo remotus – Kritik zur Führung auf Distanz“ von Markus Karp, Professor für öffentliche Verwaltung und Wissensmanagement an der Technischen Hochschule Wildau. Im Buch reflektiert der Autor die Auswirkungen der technischen Vernetzung und der sich verändernden Arbeitswelt auf unser tägliches Leben.

Publicaciones de Rogue Scholar

A few words about risk management

Neu und Open Access. Markus Karp: Homo remotus – Kritik zur Führung auf Distanz (Magdeburg: Kompakt Media 2023)