An article in CFO Magazine caught my eye recently. It describes how companies are usually unprotected against “Black Swans”… risks that rarely happen but cause extreme pain when they do.
Nothing is more true than with large credit exposures in business.
“There’s also the ‘problem of induction.’ With inductive reasoning we project the future based on events we’ve observed in the past. If it hasn’t happened to us, we assume it won’t happen.”
I see it all the time and so do you.
For the full article, click here: Risk Psychology Invites Exposure to Black Swans. You’ll find it helpful with all risk exposure checklist items in a business.
We’re seeing increasing evidence of a recession in the coming months. It’s likely that more businesses will have “black swans” so now is the time to prepare.
For you bankers and insurance brokers, this should be on your exposure checklist to be discussed with every client and prospect.
Investment bankers and private equity funds: part of your due diligence during business acquisitions or capital raising should include financial risk, large credit exposures and how to protect against them.
For a free guide to how I can help you grow and maintain your book of business, click here: https://www.tateparker.com/partner/
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