Risk and crises: How the models failed and are failing. Jon Danielsson. Modelsandrisk.org

Risk and crises: How the models failed and are failing

February 18, 2011
Financial models are widely blamed for underestimating and thus mispricing risk prior to the crisis. This column analyses how the models failed and questions their prominent use in the post-crisis reform process. It argues that over-relying on market data and statistical forecasting models has the potential to further destabilise the financial system and increase systemic risk.

Published on VoxEU.org

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