Author Archives: Thomas Coleman

About Thomas Coleman

Thomas S. Coleman is Senior Advisor at the Becker Friedman Institute for Research in Economics and Adjunct Professor of Finance at the Booth School of Business at the University of Chicago. Prior to returning to academia, Mr. Coleman worked in the finance industry for more than twenty years with considerable experience in trading, risk management, and quantitative modeling. Mr. Coleman earned a PhD in economics from the University of Chicago and a BA in physics from Harvard College.

Thinking about VaR – and not as “Worst Case”

Value at risk or VaR has a bad name. But much of the problem is how we think about and how we talk about VaR. Words do matter and using the wrong terms and phrases often takes us down the … Continue reading

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Detailed Contents for Quantitative Risk Management

Here is a detailed table-of-contents for my book Quantitative Risk Management – for some obscure reason the book was published without a detailed table-of-contents. Quantitative Risk Management A Practical Guide to Financial Risk Thomas S. Coleman Detailed Contents as formatted … Continue reading

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Risk Management Talk at Greenwich Library

On September 6th 2012 I gave a talk at the Greenwich Library, “How to Think About Risk Management”, co-sponsored by the CFA Society of Stamford. I talked about my views on risk management, focusing on two topics: Arguing for risk … Continue reading

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Graceful Failure and JPMorgan’s Loss

The biggest challenge facing regulators and politicians following the financial crisis is to engineer a regime that allows graceful failure for systemically important financial firms. Failure is, ironically, one of the great strengths of a market-based economy – the creative … Continue reading

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Personal Income and Consumption

Summary I have argued for some time that a robust recovery will occur after households adjust spending downwards. The “savings rate” in the U.S. has risen since the financial crisis, but this reflects changes in taxes, not changes in household … Continue reading

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Risk, Black Swans, and Brown Turkeys

The mathematics of volatility and VaR alone are just not enough for understanding risk in today’s environment. We are living in extraordinary times – probably the most extraordinary in three generations. (Don’t get me wrong – I’m not arguing that … Continue reading

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JPMorgan Chase loss seems to be an idiosyncratic trading loss

The JPMorgan Chase loss seems to be a plain-vanilla trading loss – unfortunate and bad news, but not a sign of something more serious in the financial system. Bad as they are, we have lived with these kind of trading … Continue reading

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Rights and Wrongs of Value at Risk (VaR)

With the loss announced by JPMorgan Chase last week there are, once again, loud and varied denunciations of Value at Risk or VaR. Unfortunately, such talk sheds little light upon and often shows misunderstanding of the underlying issues. Take the … Continue reading

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JPMorgan Chase loss and idiosyncratic vs. systemic risk

The loss announced by JPMorgan Chase last week raises many interesting questions, one being the distinction between idiosyncratic and systemic risk. The distinction between idiosyncratic risk versus systemic risk (and idiosyncratic vs. system events) is vitally important because the sources … Continue reading

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Quantitative Risk Management

Published by Wiley in May 2012, this book presents a road map for tactical and strategic decision-making designed to control risk and capitalize on opportunities, covering the techniques and tools used to measure and monitor risk. These techniques and tools … Continue reading

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