Model risk

• May 26, 2026
• financial-risk-management

Banks and Risk Management: Skoglund & Chen Chapter 1 Explained

Financial Risk Management by Jimmy Skoglund and Wei Chen (ISBN 978-1-119-13551-7)

Chapter 1 is the on-ramp. Skoglund and Chen do not jump straight into VaR formulas. They ask a harder question first: why does risk management exist in banks at all, and why did regulators and shareholders both decide it was worth billions in systems and headcount?

• Feb 21, 2026
• finance

Financial Modeling: A Warning About Models in Practice

We are now entering Part 5 of Wilmott’s book: Advanced Topics. Everything so far was classical foundation. Lognormal random walks, Black-Scholes, delta hedging, portfolio theory. Well-established stuff. From here on out, we go beyond the standard model and into territories where things get interesting, controversial, and sometimes dangerous.