Publication of the REF 133 - June 2019 " The price of risk "

In finance, risk can be defined as the probability of not getting an expected return. Many mechanisms or contracts make it possible to shift this risk to third parties in return for payment, which therefore corresponds to the price of the risk. This is a central element of finance. This issue of the REF addresses three aspects of this concept. The first part analyzes the determinants that constitute risk: individual perception, frequency, stability, risk aversion, etc. As for the second part, it focuses on the prices of certain specific, well identified actual risks, some of which play an increasing role, such as cyber risks, natural disasters, and dependency. Finally, the third part focuses on the price of certain synthetic risks, such as the equity risk premium, which result from the combination of elementary risks and represent a real challenge for analysts.

In this issue, the Review also publishes a financial history column devoted to the concept of odious debts and its evolution. Finally, the issue contains as well a review of the future of the eurozone, in addition to a "miscellaneous" article concerning the decentralization of cryptocurrencies.