Elena Esposito

Uncertainty as a resource. Anticipatory techniques in finance

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The paper discusses the commercialization of risk in structured finance, on the basis of models of portfolio management that should operate in «risk-neutral» markets. Models promise to consider all possible future courses and to be equipped to face them, hence to offer a protection against risk even without knowing exactly which future will get real. In the financial crisis this promise was not fulfilled, but not because the models were incorrect. The paper discusses and comments on the circular dynamic in which models defeat themselves: paradoxically, models did not work because they were correct and have been followed. The awareness of this circularity is leading in recent times to different ways to govern the future in the present: anticipatory techniques that use uncertainty as a resource rather than as a problem to be neutralized. Models are used to learn, not to predict - to prepare for surprises, not to specific events.


  • Structured Finance
  • Risk-neutral Markets
  • Financial Models
  • Model Risk
  • Uncertainty


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