Business Risk

List of Commonly Conflated Financial Terms

List of Commonly Conflated Financial Terms

In this blog post we discuss a number of financial terms whose precise meaning is frequently intentionally or unintentionally obscured. As a result those terms may, like a Rorschach Blot, mean different things to different people. Unlike this famous psychological test, ambiguity in weighty financial matters can have adverse consequences.

Reading Time: 13 min.
According to wikipedia Conflation is the merging of two or more sets of information, texts, ideas, opinions, etc., into one, often in error. This may lead to misunderstandings, as the fusion of distinct subjects might obscure analysis of relationships which are emphasized by contrasts. Why does conflation happen in the first place? There are several possible factors which in some contexts may be co-existing and overlapping: gratuitous (over)simplification driven by laziness or habit literacy gaps in either the originator or the receiver of information an objective to frame, mislead or otherwise be economical with the truth In this blog post we discuss a number of interrelated financial terms whose precise meaning is frequently intentionally or unintentionally obscured.
9 Things They Do Not Tell You About Risk Management

9 Things They Do Not Tell You About Risk Management

Risk management means different things to different people. In this post we explore some truths about professional risk management that highlight both the challenges it is facing as a discipline and the significant role it can play towards a sustainable future

Reading Time: 12 min.
9 things they do not tell you about risk management Risks don’t fall from the sky, they are generated by other people Informal Risk Management was practiced by individuals since time immemorial. This is the domain of intuitive decision-making, assessing a situation on the spot and taking immediate action to avoid obvious risks. Over aeons empirical risk management has collected a treasure of heuristics, rules of thumb and colorful Risk Management One-Liners such as: There is never only one cockroach.
Visualization of a Planet in Lockdown

Visualization of a Planet in Lockdown

We visualize global mobility patterns over a full year of pandemic induced lockdowns

Reading Time: 5 min.
Visualizing a year in lockdowns and restricted mobility As we move into February 2021 the world will be experiencing almost a year under pandemic conditions. This has markedly changed behavioral patterns of human mobility across the board. One major difference with previous pandemics is that through the use of a variety of digital technologies and new data collection channels we know have an unprecedented view of those changing mobility patterns.
A Global Mobility Index

A Global Mobility Index

We introduce a global mobility index that averages Google mobility data across all available countries (weighting by population) to provide an overall view of how the pandemic has influenced human mobility

Reading Time: 6 min.
Constructing a Global Mobility Index (GMI) In previous posts (here, and here) we introduced new Open Risk Dashboard functionalities that integrate COVID-19 community mobility data (currently focusing on the datasets provided by Google). As a reminder, these reports chart over time human mobility trends collected from mobile geolocation data. The granularity is by geography and across different categories of places / activities such as retail and recreation areas, groceries and pharmacies, parks, transit stations, workplaces, and residential areas.
Comparing Google Community Mobility Reports Across Countries

Comparing Google Community Mobility Reports Across Countries

Reading Time: 5 min.
The community mobility reports and OpenCPM In a previous post we introduced new OpenCPM functionality that integrates COVID-19 community mobility data (currently from Google). The reports chart movement trends over time by geography, across different categories of places such as retail and recreation, groceries and pharmacies, parks, transit stations, workplaces, and residential. While these reports are unlikely to persist as open data sources in the long term, the current availability (as of May 2020) enables providing within OpenCPM a mobility data dashboard that can help draw insights through visualization and statistical analysis.
Exploring Community Mobility Reports Using OpenCPM

Exploring Community Mobility Reports Using OpenCPM

Reading Time: 7 min.
The community mobility reports and OpenCPM As the COVID-19 pandemic unfolded technology providers (most notably Google and Apple) made available to the public aggregated and anonymized data about human mobility in the crisis period (on the basis of smartphone location data). These Community Mobility Reports provide insights into how mobility patterns changed in response both to pandemic news and policies aimed at combating COVID-19. The reports chart movement trends over time by geography, across different categories of locations and activities, such as retail and recreation, groceries and pharmacies, parks, transit stations, workplaces, and residential.
NACE Classification and the EU Sustainable Finance Taxonomy

NACE Classification and the EU Sustainable Finance Taxonomy

Reading Time: 1 min.
NACE Classification and the EU Sustainable Finance Taxonomy The integration of climate risk and broader sustainability constraints into risk management is a monumental task and many tools are still lacking. Yet there is strong support and bold initiatives from policy bodies and an increasing focus from the private sector side. The EU (Sustainable Finance) Taxonomy is one such initiative of fundamental significance as it attempts to map at a granular level economic activities with respect to their climate risk mitigation or adaptation potential and create tangible metrics and thresholds to measure progress (the ultimate anti-greenwashing treatment)
Top 10 Reasons why Silicon Valley cannot disrupt Wall Street (yet)

Top 10 Reasons why Silicon Valley cannot disrupt Wall Street (yet)

Reading Time: 8 min.
Top 10 Reasons why Silicon Valley cannot disrupt Wall Street (yet) The Top Ten list of why Silicon Valley cannot Disrupt Wall Street (yet) was published first here in October 2014 Motivation The possibility, heck the inevitability, of Silicon Valley (representing more generally new technology entrants in finance) aiming to disrupt Wall Street (representing generally incumbents) is one of the fascinating memes of our times. Yet while the potential of technology to reshape financial services is not really in question, the manner and timing that this might happen are entirely different stories.
Business Model Risk

Business Model Risk

Reading Time: 5 min.
Business Model Risk - The Forgotten Risk Type Sustainable business models that demonstrate adequate profitability over long horizons are key to a healthy market economy. This applies to firms and organizations of any size and in any sector. But how do we determine what is sustainable and how can we tell a risky business structure from a stable one? On the small-scale end of the size spectrum we have the domain of startups and SME’s.
White Paper 05, Identification of Business Model Risks

White Paper 05, Identification of Business Model Risks

Reading Time: 0 min.
Open Risk White Paper 5: Identification Framework for Business Model Risks We develop an analytical framework for the systematic identification of business model risks. The framework utilizes as a starting point a simplified business model schema known as the Business Model Canvas. We review each one of the elements of the schema in turn, identifying the main risk characteristics associated with each. Download Download OpenRiskWP05_010916 Citation @ARTICLE{OpenRiskWhitePaper05, author = {P.
White Paper 04, Open Risk Model Taxonomy

White Paper 04, Open Risk Model Taxonomy

Reading Time: 1 min.
Open Risk White Paper 4: Open Risk Model Taxonomy We develop a taxonomy for risk models that aims to support an open source risk models framework. The proposal builds on and extends some commonly used risk taxonomies within financial services firms but introduces some significant new elements. We first review the motivation for risk taxonomies, the concepts and tools that are involved and some weaknesses of current schemes. We try also to clarify the link between risk models and risk taxonomies.
The periodic table of risk elements

The periodic table of risk elements

Reading Time: 5 min.
The periodic table of risk elements You know the periodic table of elements, even if you flunked your science courses! It is the large colorful and blocky table that hanged on every school’s classrooms before becoming yet another mobile app. The periodic table is one of the early and iconic achievements of science. It lists all the pure chemical elements found in nature, the building blocks of all possible material substances.