Have We Tamed The Grey Rhinos— The Known Unknowns Of Financial Risks?

The last few years have seen India step up its conservation efforts. Did you know that the number of Rhinos in India has increased from 2,577 to 4,014 since 2006? While you may have seen these majestic beasts on a TV documentary or even for real during a safari, it is also likely that you would have heard the term “Grey Rhino” in the context of financial risk. In the world of Finance, most discussions on risks revolve around the term “Black Swan”: events that are so rare, that we often cannot even perceive the possibility of their existence. These are the Unknown Unknowns. Covid 19 is an example. On the other hand, there are the Grey Rhinos or Known Unknowns, the risks that are highly probable, with high impact and yet neglected. By the way, practically all Rhinos are grey in colour. Grey Rhinos are not random unexpected events but come with a series of warnings....