Ten Great Risk Managers in History
In This Chapter
Ideas ahead of – and lost in – time
Groundbreakers and prophets
Although the modern field of financial risk management dates back only to 1987, it’s built on many older ideas. This chapter contains a more or less random list of people who illustrated important risk-management concepts over the years. Read it for inspiration or for examples to use in discussion and presentations.
Abraham Wald was one of many brilliant Jews chased out of Europe by the Nazis in the 1930s and 1940s who repaid the favour by lending their brains to the Allied war effort. Wald was a brilliant mathematician who played a key role in the post-World War II (WWII) applied mathematics revolution that turned quantitative analysis into a useful tool for real decision making, and laid important foundations for modern financial risk management.
During WWII, the US Army undertook a study of damage to bombers from enemy fire in order determine where to place additional armour on aircraft. Each additional pound of armour meant one less pound of bombs, which meant flying more missions for the same effect. More armour meant fewer lives lost, but more missions meant more lives lost. The Army wanted to know the optimal trade-off, so they asked Wald, ...