Christina I. Ray Extreme Risk Management: Revolutionary Approaches to Evaluating and Measuring Risk

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A revolutionary new approach for detecting and managing inherent riskThe unprecedented turmoil in the financial markets turned the field of quantitative finance on its head and generated severe criticism of the statistical models used to manage risk and predict "black swan" events. Something very important had been lost when statistical representations replaced expert knowledge and statistics substituted for causation.Extreme Risk Management brings causation into the equation. The use of causal models in risk management, securities valuation, and portfolio management provides a real and much-needed alternative to the stochastic models used so far. Providing an alternative tool for risk modeling and scenario-building in stress-testing, this game-changing book uses causal models that help you: Evaluate risk with extraordinary accuracyPredict devastating worst-case scenariosEnhance transparencyFacilitate better decision makingTABLE OF CONTENTS Plausibility vs. Probability: Alternative World ViewsThe Evolution of Modern AnalyticsRisk Management Metrics and ModelsThe Future as Forecast: Assumptions Implicit in Stochastic Risk Measurement ModelsAn Alternative Path to Actionable IntelligenceSolutions: Moving Toward a Connectivist ApproachAn Introduction to Causality: Theory, Models, and InferenceRisk Inference Networks: Estimating Vulnerability, Consequences, and LikelihoodSecurities Valuation, Risk Measurement, and Portfolio Management Using Causal ModelsRisk Fusion and Super Models: A Framework for Enterprise Risk ManagementInferring Causality from Historical Market BehaviorSensemaking for Warnings: Reverse-Engineering Market IntelligenceThe United States as Enterprise: Implications for National Policy and Security