Talking Risk

Until the Bank becomes aware that currency notes have been stolen, they can be spent as normal. However, it would mean that there is currency in circulation that’s unaccounted for.

So let’s say somebody give me a hundred dollar bill that they happen to thief out of a box of new notes; if I go across by Ram’s with it, they ain’t going take it from me?

Before you answer that, I have a question – why you want to accept stolen money?

It’s not like I am going to knowingly accept stolen money. I’m just using that scenario to make a point!

And what happens when the central bank finds out?

That is correct. Hence the reason why there are strict controls, to minimize loss to the Bank and the public.

There are measures to recover the unissued currency notes.

In other words, it’s not that the notes don’t have a value, but they are not recognized by the Central Bank as legal tender until they have been issued.

On that note, I will be very careful who give me money from now on.

Back to what we were saying earlier about high risks. Very often we confuse the impact of a risk with the risk itself. The impact refers to the worst that can happen or how much your objective would be affected if a particular event occurs.

However, because the impact may be high, meaning that there may be a significant negative impact on the objective, that doesn’t mean that it’s a high risk.

Ok, now you are confusing me!

Ok, I get that. So where is the confusion?