The Illusion of Control - Why Financial Crises Happen, and What We Can (and Can't) Do About It

A challenge to the conventional wisdom surrounding financial risk, providing insight into why easy solutions to control the financial system are doomed to failFinance plays a key role in the prosperity of the modern world, but it also brings grave dangers. We seek to manage those threats with a vast array of sophisticated mathematical tools and techniques of financial risk management. Too often, though, we fail to address the greatest risk-the peril posed by our own behavior.Jon Danielsson argues that critical risk is generated from within, through the interactions of individuals and perpetuated by their beliefs, objectives, abilities, and prejudices. He asserts that the widespread belief that risk originates outside the financial system frustrates our ability to measure and manage it, and the likely consequences of new regulations will help alleviate small-scale risks but, perversely, encourage excessive risk taking. Danielsson uses lessons from past and recent crises to show that diversity is the best way to safeguard our financial system.

Product details

• Authors: Jon Danielsson, Jon (London School of Economics) Danielsson, Danielsson Jon
• Publisher: Yale University Press Ltd
• Languages: English
• Product format: Hardback
• Released: 30.06.2022
• EAN: 9780300234817
• ISBN: 978-0-300-23481-7
• No. of pages: 288
• Dimensions: 164 mm x 241 mm x 25 mm
• Subjects: Social sciences, law, business > Business > General, dictionaries; SOCIAL SCIENCE / Human Geography, Finance, BUSINESS & ECONOMICS / Industries / General, POLITICAL SCIENCE / Political Economy, BUSINESS & ECONOMICS / Finance / General, POLITICAL SCIENCE / Public Policy / Economic Policy, macroeconomics, Economic Geography, Political Economy, Central / national / federal government policies, Economics of specific sectors, Central government policies, Finance and the finance industry