Bank of Japan’s November report of recent economic and financial developments1  Bank of Japan, Communication 15 November 1999. *  *  *  The Bank’s view2 Japan’s economy, which had stopped deteriorating, is currently turning to improve, with exports and production increasing. However, clear signs of a self-sustained recovery in private demand have not yet been observed.
Practitioners need to keep in mind that rare events implicit in the tails of distributions will occasionally occur. The critics  4  BIS Review 85/2001  don’t seem to mention perhaps the biggest risk of the increasing importance of models: the lulling of the users into a false sense of well-being that loses sight of these potential tail events.