Correction Concepts
Understanding the Cobra Effect in Finance
Financial risk management failures, from portfolio insurance to VaR, have amplified the crises they were built to prevent.
Factually incorrect
What was corrected
What the page claimed
The article's comparison table stated SVB passed a 2022 stress test, described VaR as a maximum-loss probability, and said SVB's HTM losses were invisible in public reporting.
What was corrected
Removed the SVB stress-test claim and dated its first supervisory test to 2024, corrected VaR to a threshold measure that does not bound tail losses, and clarified that SVB's HTM losses were disclosed in footnotes though excluded from headline capital.
Why this is better
These were verifiable factual errors about stress-test history, the definition of VaR, and financial-statement disclosure. Corrections use the Federal Reserve's SVB review and standard risk definitions rather than new unverified sources.
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