Risk Modelling: Is the Response to the New Complexity Really So Simple?

Risk modelling requires a radical revamp for the post-GFC economic environment. Oddly enough, the new complexity seems to demand a more simplistic approach to factoring in uncertainty. Focusing excessively on detail may increase the risk of missing the obvious, warns Andries Terblanche, a professor at the Australian School of Business and chair of financial services at Big Four accountancy firm, KPMG. Remodelling risk is controversial and Terblanche admits that a single, comprehensive model remains elusive. Meanwhile, as instability prevails across the global economy, debate over rethinking risk continues.