Understanding the Intricacies of Financial Black Swan Events: How to handle detection, prevention and response

Bas Uildriks

Consultant and Transaction Monitoring Expert, The Netherlands

Corporate Banking

According to the Corporate Finance Institute , the concept was first coined in 2001 by former Wall Street trader Nassim Nicholas Taleb who wrote about it in his book ‘Fooled by Randomness’ and later expanded upon it in his 2007 book ‘The Black Swan: The Impact of the Highly Improbable’ . It is defined as a highly improbable event characterized by three things: it is unpredictable, it carries a massive impact and severe and widespread consequences, and after the Black Swan event occurs people tend to rationalize the event as having been predictable (which is known as ‘hindsight bias’).

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Understanding the Intricacies of Financial Black Swan Events: How to handle detection, prevention and response

Financial industry cybercrimes are most definitely on the rise. Black Swan events can also be a form of cybercrime in the financial world but, by their very nature, are much more difficult to foresee or predict.

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