Risks of extreme and rare events in Asset Management

摘要

Modern companies operate in a complex business and operational environment, which generates new types of risks that were relatively unknown just a few decades ago (e.g. cyber security), and creates favorable conditions for the emerging of extreme and rare events that may seriously perturb the current and long-term performance of enterprises. Current practices generally neglect taking into account those risks. Analyzing and managing them through traditional methods has recently shown to be less efficient. Advice and input from technical experts, strategic planners or knowledgeable managers may be insufficient or too narrowly focused to adequately manage the complexity of the systems and structures in a constantly changing and barely predictable environment. It is generally due to a lack of knowledge regarding the type and range of uncertainties, the nature of interconnections, the level of complexity, as well as our low ability to predict future events. Consequently, enterprises need alternative and enhanced methods and tools in order to better understand and model the complex business and operational environment and the associated risks.