- Research Feature
- Read Time: 17 min
Over the past decade, a number of the world’s respected companies have collapsed. A factor was these companies’ approach to risk management. Two different views have evolved on how risk should be assessed. The first — the frequentist view — is based on historical data. The second, or Bayesian, considers risk to be in part a judgment of the observer. Many measures are being deployed to prevent future crises — a shift from frequentist to Bayesian risk management should be part of this effort.