«The Illusion of Certainty»
«The More Systematically People Proceed, the More Effectively Chance Can Strike Them (Dürrenmatt) Or: Renaissance of the Insurance Principle?»
Speech by Matthias Haller
Founder and president der Risk Dialogue Foundation
Leave nothing to chance”: This headline from a bank publication on financial risk management reflects the common understanding of ‘chance and predictability’ and the associated desire for control. As understandable as the desire for protection against unpleasant coincidences is, the idea of being able to eliminate unwanted uncertainty with good planning is just as seductive. But how much can chance be controlled at all and what happens when we believe we have banished it to the realm of the negligible? In recent years, risk controllers in the financial sector have shown us a paradox: exactly where we thought and hoped to be able to calculate better and better, i.e. to contain risks and coincidences, we have been serially overrun by major ‘coincidences’. The aim of this article is to clarify misunderstandings about chance and predictability. I therefore embark on a journey through the (intellectual) history of ‘coincidence’. It shows the momentous shift in perspective between dangers and opportunities in the understanding of risk. It sheds light on the deceptive certainties and devastating consequences of the supposedly chance-protected financial market. And, it leads to the recommendation to understand risk as a multidimensional, dynamic variable and not to exclude the view of the ‘worst possible developments’ (Dürrenmatt).
Here you can find the text of the speech as PDF:
