The Illusion of Control: Why Financial Crises Happen, and What We Can (and Canā t) Do About It

Danielsson, Jon

ISBN 10: 0300234813 / ISBN 13: 9780300234817

Published by Yale University Press, 2022

About this Item

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Bibliographic Details

• Title: The Illusion of Control: Why Financial Crises Happen, and What We Can (and Canā t) Do About It
• Publisher: Yale University Press
• Publication Date: 2022
• Language: English
• ISBN 10: 0300234813
• ISBN 13: 9780300234817
• Binding: hardcover
• Condition: Very Good

About this title

Synopsis

A challenge to the conventional wisdom surrounding financial risk, providing insight into why easy solutions to control the financial system are doomed to fail
 
Finance 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.
 
Jón Danķelsson 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. Danķelsson uses lessons from past and recent crises to show that diversity is the best way to safeguard our financial system.

About the Author

Jón Danķelsson is a professor of finance and the director of the Systemic Risk Centre at the London School of Economics. He is the author of Financial Risk Forecasting and Global Financial Systems: Stability and Risk.