Value at risk (VAR) is a risk measurement tool used to estimate potential losses from market risk exposures over a target time period at a given confidence level. It was developed in the 1990s by J.P. Morgan and RiskMetrics as a way to quantify and aggregate risks across business lines. While VAR provides a simple single number for risk, it has limitations such as the potential to underestimate losses in extreme market moves and an inability to predict the timing and size of losses. Extensions of VAR have been created to address some of these limitations.