This document discusses risk management in development and contains quotes from several World Bank leaders and economists. They advocate shifting from crisis response to proactive risk management to build resilience against economic fluctuations and protect development gains. However, individual initiative requires a supportive environment, and risk creates special challenges for policy. The document also examines theories and practices in finance and questions whether they adequately explain market behavior and crises.

1. Right Goal,
Wrong Tools
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

2. Jim Yong Kim,
World Bank Group
President
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

3. “Our new approach calls for individuals
and institutions to shift from being ‘crisis
fighters’ to proactive and systematic risk
managers. Doing so will help build
resilience, protect hard-won
development gains, and move us closer
to achieving the World Bank Group’s
goals of ending extreme poverty and
boosting shared prosperity.”
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

4. Kaushik Basu,
World Bank Chief
Economist and Sr. Vice
President
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

5. “This World Development Report shows
human decision-making falters most where
risk is involved – for this reason, risk creates
special challenges for development policy.
As globalized nations contend with
fluctuations between good and bad
outcomes, there is at times a propensity to
shy away from development and
globalization, when in fact doing so is to opt
for the bad outcome in perpetuity.”
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

6. Norman Loayza,
Director, World Bank World Development
Report
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

7. “Although people’s own efforts,
initiative, and responsibility are
essential to manage risk, their
success –in terms of resilience
and prosperity – will be limited
without a supportive
environment.”
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

8. “An aim without a
method is useless. A
method without an aim
is dangerous.”
- W. Edwards Deming
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

9. “No problem can be
solved from the same
level of consciousness
that created it.”
- Albert Einstein
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

10. “Investment in productive assets, whether
businesses, farms, or real estate - ideally,
should have the ability in inflationary times to
deliver output that will retain its purchasing
power value”
“ The riskiness of an investment is not
measured by beta but rather by the reasoned
probability of that investment causing its
owner a loss of purchasing power over his
contemplated holding period.”
Berkshire Hathaway, letter to Shareholders, February
25, 2012 by Warren E. Buffett, Chairman of the Board
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

11. Jan,1990 to Feb,2014
Berkshire
Hathaway
Dow Jones
Index
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

12. “the opportunity cost of capital
depends on the project’s beta.
...Siemens, a German industrial
giant, uses 16 different discount
rates, depending on the riskiness of
rates
each line of its business.”
Fundamentals of Corporate Finance, 3rd edition,
ISBN 0-07-553109-7, Richard A. Brealey, Stewart C.
Myers, Alan J. Marcus, Stephen A. Ross, Randolph
W. Westerfield, Bradford D. Jordan, pages 421-423.
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

13. Feb,2004 to Feb,2014
Siemens
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Scie

14. Corporate financial
practice conflicts with
rational investor
expectations, breeds
‘Financial Crisis’
such as 2008
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Science', http://valueerodingfallacies

15. “....we do not yet have complete
and generally accepted
explanations for how financial
markets function......Mispricing
of assets may contribute to
financial crises”
crises
- 2013 Nobel Economic Sciences
Prize Committee
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Science', http://valueerodingfallacies

16. Raises questions,
‘Financial Economics’
never asked
Answers those,
‘Financial Economics’
never could
To prevent ‘FINANCIAL CRISIS’, and transform
‘Financial Management’ from a ‘Cultivated Art’
into a truly ‘Objective Science’
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Science', http://valueerodingfallacies

17. http://valueerodingfallacies.blogspot.in
Copyright 2014-Rajesh D.Mudholkar, Author, 'The Timeless Essence of Financial Science', http://valueerodingfallacies