It′s time to learn the truth about the financial crisis.
In The Number That Killed Us, risk management and derivatives guru Pablo Triana presents a shocking look at Value at Risk (VaR), the mathematical model that encouraged banks to take on toxic assets they should never have touched and that ultimately brought the international financial system to its knees. Examining the myriad problems that went overlooked during the two decades when VaR was the king of financial management including using the past to predict the future and depending on an algorithm instead of common sense the book discusses topics such as: the history of VaR, its role in Washington, the role of regulators and academics in a malfunctioning financial world, how bonus–hungry traders used VaR as an alibi to take reckless bets, and much more.
Essential reading for individual and professional investors, market professionals, regulators, policymakers, and anyone who wants to really understand where all the money went, The Number That Killed Us drags the risk measurement tool that has repeatedly and severely hurt the financial world into the spotlight.
April 28, 2004 Steve Benardete Gets His Wish; The World Suffers xxvii
Chapter 1 The Greatest Story Never Told 1
Chapter 2 Origins 49
Chapter 3 They Tried to Save Us 71
Chapter 4 Regulatory Embracement 89
Chapter 5 Abetting the CDO Party 113
Chapter 6 VaR Goes to Washington 161
Chapter 7 The Common Sense That Should Rule the World 181
Finale The Perils of Making the Simple Too Complex 213
Guest Contributions 223
Why Was VaR Embraced?
A Q&A with Nassim Taleb 223
A Pioneer Wall Street Rocket Scientist s View An Essay by Aaron Brown 226
About the Author 253