The Mis-Measurement of Risk

Highly recommended….

“The Contribution of the Financial Sector – Miracle or Mirage?”, Speech by Andrew Haldane, BoE Executive Director, 14 July 2010

“At a time when people believed banks were contributing the least to the economy since the 1930s, the National Accounts indicated the financial sector was contributing the most since the mid-1980s. How do we begin to square this circle?….Risk illusion, rather than a productivity miracle, appears to have driven high returns to finance. The recent history of banking appears to be as much mirage as miracle.”