ABSTRACT
Chapter 5 intervenes in debates in political economy and economic sociology about Value-at-Risk as a regulatory measure of market risk. The chapter presents the case that it was a standard of accuracy which initially drove the adoption of Value-at-Risk (VaR) in the Basel II capital recommendations. Following the purported role of Value-at Risk in significant market volatility in the late 1990s, the Bank modified its support for the use of VaR in finance by highlighting the calculation’s precision. Despite this shift to precision, the extreme events of the Global Financial Crisis saw the Bank seriously criticize the calculation.
