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EL for credit risk, a bank should build (loss) reserves for what it can expect to lose on average due to event risks329 and should also include that in its pricing. However, as we have also seen previously in the credit risk framework, if losses are lumpy or are experienced only rarely,330 then the expected losses amount will not be sufficient to cover the (unexpected) losses up to a certain level of confidence. Therefore, we also need to hold economic capital for event risks.331 In general, this amount of economic capital can be derived in the same way as for credit risk. The problem, however, is that the number of observable event risk losses for estimating the event risk loss distribution is even scarcer than the data points for credit risk. Because of the lack of sufficient data for a historical analysis, a variety of assumptions need to be made for the calculation of event risk capital, making the approach subject to challenge and criticism. In almost all of the cases, banks will have no or insufficient (historical) internal experience with major event risk losses, because by definition those events are very infrequent. To increase the number of observations, data points (mostly in the form of case studies) from as many banks and events as possible are being collected in so-called event loss databases, which are currently being built around the world.332 Since there are many different types of event risk to which a bank can be exposed, it is useful to create different categories333 of such events and adjust them for the bank s risk profile before conducting the quantitative analysis.334 These adjustments need to be made in two dimensions:

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beauty by various demographic groups, culminating in a statistical proof of general rose beauty across the human race. No one does this, though, because it s silly. A rose is beautiful, and everyone knows it. The rules I present here are important, and everyone in the know knows it. They are irrefutable. OTHER STUFF YOU NEED TO KNOW BEFORE WE GET STARTED This is not a checklist book. Every year, I speak to literally tens of thousands of business owners and managers interested in growth. After the event, people often call or e-mail me with additional questions. Without a doubt, the second most common question people ask me is, What book can I buy that will tell me how to grow my business (By the way, the most common is, How can I become a speaker That answer I ll save for another day.) The book question is an interesting one for a couple of reasons. First, they never say read. It s always what book should I buy. Perhaps I m thinking about it too much, but the question implies (to me, anyway) that the mere act of purchasing the book will somehow help your business grow. My editor estimates that 20 percent or less of all business books purchased are ever read. Second, the idea that someone has written a book that can give you specifics on how to grow your business is ludicrous. J. Paul Getty (a pretty successful growth guy) once said, No one can possibly achieve any real and lasting success or get rich in business by being a conformist. While a guaranteed 17-point growth guide checklist would undoubtedly be popular, it would also be irresponsible. Checklists don t grow businesses.

(c) Continue to roll the dough, always pressing the seam rmly after each turn. As you roll the dough, the front edge will appear to shrink. Stretch the front corners as shown by the arrows to keep the width uniform.

Recall that all new incoming e-mail messages are stored in your Inbox. While viewing your e-mails, you can tell which ones have attachments by the little paper-clip icon that appears next to message headers. When you click such a message, a large paper clip will also appear above the message text, as in Figure 33-12.

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