march 2020

The speed of it was the first thing. Markets had been volatile before — volatility was the operating environment — but the March 2020 repricing had a quality that was different from the volatility in the preceding years. Multiple asset classes moving simultaneously, in the same direction, faster than any of the risk models had been calibrated to expect, while the operational environment itself was destabilizing: teams moving to remote work in real time, with the systems and communication infrastructure that had been built for in-person operation suddenly running over home internet connections and video calls. The margin calls that arrived in those weeks arrived into an environment that had its own form of disruption happening in parallel.

What I learned about judgment in that period was learned through proximity to people who had seen versions of it before. The seniors on the desk had a kind of operational calm that wasn't indifference to the stakes — they understood the stakes precisely — but was the product of having already learned which decisions needed to be made immediately and which ones that looked urgent could actually wait an hour for more information. That discrimination is not written in any risk manual. It is transmitted person to person, through the experience of watching someone make that call and seeing how it resolved. March 2020 was a period in which a lot of that transmission happened in a compressed window, because the situations that required the judgment were arriving continuously.