During its brief history, financial risk management has been a field dominated by quantitative models. This may be due to the influence of bank regulators who demand that capital charges be calculated—which is the same thing as quantifying risk. It may also be due to disinterested senior managers who want a "silver bullet"—a single number to summarize "risk" for them. Whatever the reason, a literature on techniques for quantifying market, credit and operational risk has proliferated. This book surveys some of that literature. The focus is on leading edge techniques. Many of these have been on the leading edge for some time now without being adopted by practitioners, so there is also an element of the "bleeding edge" here.

Topics the authors emphasize include generalizations of GARCH to multiple dimensions, copulas, extreme value theory and credit derivatives pricing. They round it out with summary chapters on value-at-risk, structural credit risk models and operational risk modeling. They generally present the current state of the literature and point to interesting avenues for further research.