Did bankers understand uncertainty better before financial models?

In this episode we explore a question at the heart of finance: what is risk, really? Long before VaR models, stress tests, and algorithmic finance, bankers managed uncertainty through reputation, relationships, and social trust. Were they naïve—or were they, in some ways, more realistic than we are?

In this episode of Finance & History, Carmen Hofmann speaks with economic historian Monika Pohle Fraser about how nineteenth-century French and German bankers managed risk before modern models existed.

Drawing on archival evidence, the conversation explores a provocative idea: that trust, reputation, and social judgment often mattered more than quantitative information—and may still do today.

From universal banking and bourgeois honor to AI-driven finance, the episode asks whether modern risk management is built on better information… or simply more sophisticated fictions of certainty.