As someone who has been in the risk management business for fifteen years and who has repeatedly come up against the wall of mathematical certainty their argument is both appealing and validating. The sense of being right in the end however is somewhat tempered by the suffering that we are all experiencing and likely to experience for some time to come. Nevertheless, it’s nice to read thought pieces by experts of the reputation of Taleb and Triana that repudiate the single-minded reliance on mathematical models and their false underlying assumptions.

 

But there is something troubling about their use of one of New York’s most infamous murders as an analogy. They suggest that the bystanders, in this case the risk managers and regulators suffered from apathy. I would suggest that apathy is not a state of just not caring; it is actually active decision making that just feels like not caring because it is devoid of human compassion. We seem to have convinced ourselves that our financial world is somehow disconnected from our ethical responsibilities. We are learning that nothing could be farther from the truth.