"What are we talking about here? Cats? Racoons?" the Vice President said breezily.

Humour was allowed at the bank -- despite its size they still called it a 'bank' -- but with the Board presentation so close, Stephanie's nerves were stretched taut. That she out of all the myriad risk department heads had been chosen to make the presentation was an almost unbelievable chance, and it could so easily be spoilt.

Still, the Vice President was at least human. Stephanie called up the chart. "'Fat tails' is just the informal name for the image here," she explained as calmly as she could. "We expect the outcomes to cluster in the middle, forming this bell shape." She pointed to the chart. "But there are a few less-likely events in these regions that extend from the rim of the bell like tails -- "

"Got it!" the Vice President said. "And the tails are fat because. . . ?"

"Because there are more outcomes there than you -- than a layman -- would expect. There is more risk in the tails than we think. Space-time synchronicity," she gestured to the closed doors where directors had been patched in from all over the galaxy, "just makes it worse. That's what it means," Stephanie ended rather lamely.

The Vice President frowned. "Is that going to satisfy the Board?"

"Well, that's what the presentation is about." Stephanie stood her ground. "We've got a methodology -- "

Just then, the space in front of them flickered. They were in a virtual waiting room, and the Board had almost reached their item on the agenda.

"Damn the methodology!" the Vice President muttered under his breath. "We'll wing it!"

Stephanie activated the presentation, and they had a few moments for the Vice President to walk through it offline before the Company Secretary flashed them into the meeting. Board members surrounded them; Stephanie hadn't even seen some of the races before. The Chairman -- an Arcturian with tentacles wreathing his head -- invited them to begin.

Undaunted, the Vice President launched into the presentation, following the autocue. The presentation graphics were set up as a series of domains through which he led the Board members as if they were on a country walk.

The first domain was a well-ordered park, in which the bank's loans were repaid on time, its investments matured in good order, and regulation flowed as a steady stream confined within its banks. The sun shone; flowers bloomed; profits were good if not spectacular.

"A great place to raise your children . . . ." the Vice President joked, departing from the autocue. Stephanie glanced nervously at the Chairman; the tentacles were twitching.

". . . but not the real world," the Vice President went on, quickly leading members through the park gate into the next domain.

Here, the sun still shone, but a tree had fallen to the ground, obliterating a flower bed and breaking the banks of the stream. A pool of water was building up, and even as the Vice President led them past, it flowed out across the path and wet their virtual feet.

"Sorry about that!" the Vice President said quickly, calling up an wheeled vehicle. They all clambered on board, and he explained that here, five-sigma out from the mean, unusual events were to be expected. The bank had to guard against these.

"But you forgot," one of the directors said quietly. He was curious furry creature Stephanie hadn't seen the like of before.

"Now, Damien," the Chairman reproached this director gently. "They were prepared, just that in the heat . . . . More realistic, you could say."

"Yes, the difference between hot and cold standby," the Vice President said gratefully. "As I was saying . . . ."

He took him a while to regain his composure, and forgot about the other tail. Stephanie had to remind him, and the Vice President then waxed lyrical about the potential upside, the occasional freak events that, like buried treasure found at a tree root, would work in the bank's favour.

The Board members were mostly enjoying the scenery, which the production house had done rather well. However, Damien still wore a furry frown.

Nudged by Stephanie, the Vice President signalled to the driver, and they swept through the next gate.

Here, the Vice President needed no reminding. The vehicle that he called up for them was armoured like a tank. Through the reinforced windows, they saw a storm-tossed landscape where lightning set trees ablaze, flood-waters submerged them, and as their vehicle hauled itself onto a promontory, the ground opened in a miniature earthquake. They stopped at the brink of a gaping hole.

"Imagine a world," the Vice President was saying, "in which everything goes wrong. . . ."

"Not everything," Stephanie whispered. They were only eight-sigma out. "Just multiple things going wrong together."

"Exactly," the Vice President beamed at the Board. "A world in which -- "

"Chairman," Damien broke in. "Perhaps we could invite -- ah -- this young lady. . . ?" The Chairman's tentacles waved Stephanie on with evident relief. "Just explain to us what kind of world we are actually in," he said.

Stephanie took a breath. The autocue, geared to the style of the Vice President, rolled on with its metaphors of storms and floods. She switched it off, and paused the diorama.

They were conducting a virtual journey through probability space, Stephanie explained. Now they were progressing along the tail of that space, through outcomes that were progressively less and less likely. In the present domain they encountered extreme but plausible combinations of events. She gave examples -- a debtor defaulting and the custodian disappearing with the collateral as well. "To protect the bank against such events, either we insure against them from the start -- which is expensive -- or we try to anticipate when such events are becoming more likely. . . . "

She paused, and saw that the Board members were paying attention. More confident now, she challenged them. "It is a matter of risk appetite. We need you to tell us the risk level you are prepared to accept -- not forgetting upside risk as well as downside -- and we will tell you the likely return."

The Board members looked at one another. A decision? They obviously hadn't expected that!

Only Damien was unabashed. "I think you need to tell us more. What happens if we go further along this. . . this tail, as you call it?"

Stephanie noticed, rather belatedly, that he had a tail. Still, there was nothing to be done about that. She signalled, and their vehicle pulled back from the chasm and drove through the next gate.

In the next domain their vehicle became a heli-car that hovered over what was now impassable terrain. Stephanie explained that this was a world in which everything -- in the normal sense of the word -- would go wrong. No counterparty would remain standing, no government would remain secure; all kinds of accidents would combine to wreak the worst imaginable outcomes on the bank.

"And what do we do about all of this?" the Chairman asked.

Stephanie hesitated. "I suppose it would be disaster planning, backup, things like that," she said finally. "That's really beyond my department's expertise. We provide only the risk-assessment methodology."

"So we have to pay for another set of people to look after that!" the Chairman said ruefully.

"Well, thank you very much, nonetheless" he went on, extending a gracious tentacle in her direction. "That has given us all food for thought. If no one has any more questions . . .?"

Damien's furry face popped up from his seat at the back of the heli-car. "I'm curious, Chairman -- if we have nothing else on the agenda?"

With a wave, the Chairman indicated that there was nothing else.

"Then if you would indulge me, I would like to know what happens in the rest of the tail -- if there is a 'rest'?"

Stephanie was thrown for a moment. Twelve-sigma was already beyond her professional scope, way beyond operational need. "I think there is," she said cautiously. "Let me see."

She reactivated the diorama, and the heli-car flew through the next gate. As expected, the environment through this gate was even worse than the previous domain. The heli-car was buffeted by storms, and at one point even had to transform into a spaceship and dodge off-planet in the face of an asteroid strike. Despite the versatility of their vehicle, some of the directors had obviously had enough. The Chairman thanked Stephanie again, and looked about to wrap the discussion up.

Damien requested permission to speak. "I'm still curious," he said to Stephanie. "I mean, does it stop there, with asteroids?"

Stephanie thought for a moment. "We can dig deeper into the fine-structure of the extreme regions. I am not familiar with this myself -- it's beyond our department!" she laughed nervously "but I understand -- "

Damien looked at the Chairman.

"Very well," the Chairman said gruffly. "But view-only, if you please."

Their perspective shrank to a wall screen, on which they were swept through yet another gate into another domain (the production house was very good). Here, there were no storms or quakes; the sun shone over pleasant rolling country. They viewed the scenery without any sense of motion as if they were in an old-fashioned cinema. The view swooped down to a clearing.

Then the trees in front of them shook, and a towering figure lumbered into view. "A monster!" one of the directors exclaimed. "What on earth does that have to do with risk?"

The Chairman called for quiet. "We do have extensive operations," he reminded his colleagues. "Last year, indeed, one of our branches. . . . Please continue, Stephanie."

"I'm afraid I don't know what comes next," Stephanie admitted.

Damien and the Chairman looked at each other. "Next time, come better prepared," the Chairman said curtly. "But perhaps you can still just walk us through the next stage. Unless, that is, the Vice President. . .?"

But the Vice President, immersed in his personal, had long ceased paying attention to the proceedings.

Stephanie reactivated the diorama, wondering what, if anything, the production house had in store for them. The view opened beyond the next gate.

The darkness and scattered lights of the domain that followed made Stephanie think they were in space. Then suddenly they emerged in a brightly-lit alien world, with rocks sculpted in dizzying shapes as if there were no gravity.

". . .And in this region, multiple-hundred-sigma out from the mean," she read slowly from the autocue, "events are dominated by quantum phenomena. Ojects, even entire worlds, are spontaneously constituted out of their constituent particles, perhaps only for moments, before dissolving again. . . ."

"Thank you, that will do, that will do," the Chairman said. "Well, Damien?"

"I think it's enough for me too," Damien said, his tailed curling with satisfaction. "This domain should be safely beyond even our operations."

The Chairman closed the meeting. Directors rose and chatted to one another, before flashing back to their respective worlds. With a last tentacular wave to Stephanie, the Chairman also disappeared.

Feeling lost, Stephanie remained standing in front of the paused diorama with its absurd rocks. It was so unfair -- and she had prepared so carefully too!

"Don't feel bad," came a gentle voice from behind her. It was Damien, still there and smiling warmly, now more than anything like a Cheshire Cat. "You did very well. I just wanted to be sure you risk people didn't have your eyes too close to the ground. A risk that seems acceptable at the branch level, or national level, may not be acceptable at the world level, let alone. . . ." He gestured as if to indicate how extensive the bank was.

"Now, what I really want to say," he went on, "is that we actually have a vacancy for a Vice President. . . ."

Stephanie gasped in astonishment.

"Before you say, yes," Damien said, with another furry smile, "you should know where it is. It's in V -- ," he named the galaxy, "and you'd have to transfer there permanently."

Stephanie did not take long to make up her mind. It was good working for such a large bank!


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