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Information systems and risk management

Information systems and risk management discusses the necessity to create a structured and holistic view on all corporate information. Therefore we look at and how the holistic view should relate to upside and downside risks. Information systems are the set of analytical applications geared toward preparing corporate or project system’s data for business analyses and support to risk informed decision making. Downside risk is the product of the probability of occurrence of a hazard by the cost of the undesirable…

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Happy Holidays 2018

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ORE2-Tailings allow benchmark of tailings dams probability of failure

Today we discuss how ORE2-Tailings allow benchmark of tailings dams probability of failure. The considered mine for this case history has a portfolio of 15 dams. The figure below shows in the vertical axis the annual Probability of failure (pf) results under the form of yellow vertical bars. The extreme of the bars represent the minimum and maximum estimates of the probability of failure for each dam. Hence, the length of the bars measures the uncertainty on the evaluation of…

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Traffic accident caused major explosion in Bologna

On August 6th Italian media sadly reported: Traffic accident caused major explosion in Bologna. Traffic accident caused major explosion in Bologna; What happened Two trailers following each other collided. One of them was loaded with liquid propane. Those two then reportedly hit a third trailers loaded with new cars. The accident happened on a viaduct going through a semi-industrial/ urban environment. A fire started in the car transport trailer. By chance, several police units were either onsite or nearby and…

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Risk Management in Trading

We thank Alexander Nixon for writing this post on Risk Management in Trading Risk Management in Trading Risk management is a necessary but often overlooked requirement to successful trading. The usual scenario is that traders prioritize finding accurate entry signals before learning the basics of risk management. However, this leads to financial failure. Investopedia reports that an estimated failure rate of 90% happens when trading. Business insider documented that 4 out of 5 day traders around the world lose money. Only 1 in 100…

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Hacking Cryptocurrency Exchanges

Hacking Cryptocurrency Exchanges does not necessarily include heists. However it may use “good-old” techniques. One day an old Swiss farmer told me: “Son, if you want to stop the milk industry, unplug the electric milking machines”. Likewise, governments can declare exchanges illegal. Hacking Cryptocurrency Exchanges becomes then a political act. It’s as efficient as unplugging a milking machine. Hacking Cryptocurrency Exchanges Governments’ hacks are not the only ones, though, in a pretty open and deregulated realm. Never mind if cryptocurrences seemingly…

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Petya’s consequences dramatically highlight risk road maps significance

The cyber world is asymmetric. A few script kiddies can have the power to launch powerful world-wide, far reaching attacks as we saw with the WannaCry ransomware case. We cannot assume perpetrators will only target political or financial interests. Perpetrators could be anywhere and everywhere. From a risk management point of view, it is irrelevant whether Petya is a cyber weapon being used to carry out cyberwarfare activities or just a ransomware. However, Petya’s consequences dramatically highlight risk road maps…

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It is not necessary to invoke chaos, “complexity” and “irrational methods” to solve problems

This week we discuss why it is not necessary to invoke chaos, “complexity” and “irrational methods” to solve problems corporations and governments face when dealing with risks and uncertainties. A historic view In the mid-60s Peter L. Bernstein’s 1996 wrote a book entitled “Against the Gods, the remarkable story of risk”. The book offered a historic view of risk management and the forces which drove it. Voices have raised since claiming that accepted risk management practices have reached their obsolescence point.…

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