Description: Feature article discussing Nassim Taleb’s black swan theory. Taleb points out that banks keep their loans at full value - anchored to the book value of the loan. The solution to the problem is to use mark-to-market reporting and have volatility instead of having no volatility and then experiencing a Black Swan event.

Description: Risk management and capital budgeting are two critical components of the corporate decision process. They often need to be considered jointly at the corporate level because of their natural interaction through the dependent risk exposures and other synergetic relationships within an intricate corporate structure in a dynamic business environment. . This paper develops an integrated framework that aligns these two important corporate strategies across business divisions to optimize the streamlined enterprise strategic goal in a multi-period setting. The proposed integrated framework can serve as a practical guideline for corporate executives to optimally coordinate capital budgeting and risk management at the enterprise level.