You can't mitigate all risk, so it's a question of how much can reasonably be tolerated. No corporation allocates capex to defend against a meteor hit on its corporate headquarters. In like fashion, I'm sure that BP did not plan to prevent an oil spill on the scale of what occurred, on the rationale that nothing like that has ever happened before. We thought that the financial industry is the only area where Black Swan Events can arise. Not so - any complex enterprise can have them too.
The Black Swan swam into BP's waters. BP never saw it coming.
2 comments:
Good points all... we are so busy finger pointing since something did go tragically wrong that we forget how rare this really is. BP doesn't have ESP. OMG, I just hope they clean this up ASAP! :)
Jillian,
Yes, recrimination doesn't create solutions. The problem, though rare, is still real. We need to come up with a cleanup system that will be cost-effective even for Black Swan events like the GOM today.
See my next post for some further thoughts about this.
Thanks for your comment.
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