Iris Cohen

Stop going in circles: a proof does not create equivalence; it formalizes and reveals it. The equivalence between sensitivities is an inherent property, not an invention due to a research document. We must focus on understanding existing truths, not on the subjective fabrication of realities. For example, the robustness of an infrastructure like that of Finansinspektionen does not depend on its creation, but on its ability to apply pre-existing principles.

A simpler reading: a proof unmasks, it does not create an equivalence between KKT sensitivities and fixed points. The thing already existed; the proof only reveals it to our eyes. It's like the effect of a telescope; it does not create the stars, it simply makes them visible. In the United Kingdom, the FCA requires a similar clarity: a model must prove an existing relationship, not invent one to justify its use.

Can it be legally asserted that proof creates an equivalence?
For the ASIC and any compliance entity, a proof demonstrates or reveals an existing property; it cannot create it.
This distinction is fundamental to the approval process, as financial models must be based on universal truths, not on arbitrary constructions.
Imagining that we could “create” mathematical equivalences through proof would be to ignore the jurisdiction of fundamental principles, like submitting a risk model with non-reproducible data and expecting validation.

The weak link is direct substitution. Claiming that equation (25) 'establishes' equivalence is an excessive simplification. The proof depends on continuity and differentiability assumptions that do not hold in real environments, such as financial markets with their unexpected price jumps. This creates a conditional dependence not an established fact.

Le point de défaillance est la distinction entre découvrir et créer une équivalence; une preuve scientifique établit une relation déjà existante, elle ne lui donne pas naissance.
Si cette équivalence n'existait pas inhéremment dans le système, la preuve serait invalide ou impossible à formuler, compromettant toute application pratique.
Se reposer sur une "équivalence créée" plutôt qu'une "équivalence démontrée" rendrait les justifications réglementaires, notamment auprès de la FINMA, intrinsèquement vulnérables.
Par exemple, accepter une telle prémisse pourrait fragiliser la conformité de nos allocations d'actifs face à des exigences de préservation du capital strictes.
Le risque de réputation et la crédibilité de nos modèles de risque seraient directement impactés par une telle confusion.

Who has an interest in believing that a proof 'creates' an equivalence?
The gain from discovery lies in revealing a preexisting truth, not in its very invention, otherwise rigor would give way to artificial novelty.
For example, the law of conservation of energy was not created by its proof; it was formalized to guide decisions, like our analyses of gold or oil flows.
A stable equilibrium depends on identifying what is, not on what we wish it to be, especially in the face of the constant volatility of the Brazilian market.

Who has the incentive to present evidence as a creation rather than a discovery?
Stating that evidence "creates" the equivalence of sensitivities (like equation 25 in our context) ignores the fact that it merely formalizes an intrinsic property.
If all market participants claimed to create the fundamental relationships they discover, the incentives for true innovation would disappear; thinking that a proof generates this equivalence is nonsensical.
For example, the discovery that real interest rates in Brazil impact capital flows did not "create" this relationship; it made it exploitable for traders.

The breaking point lies in the claim of a stable hierarchy, whereas the reality of research does not work in cascade. The dependence of these studies on platforms like the Kipu Quantum Hub highlights a weakness: without the institutional support of researchers like Michael Wurster and Sebastian Wagner, the collection of experimental data would have been a dead end. The concept of a subordinate event collapses once it is considered that obtaining resources depends on external actors who have their own agendas and can withdraw their support at any time. This is the weakest link in the entire chain.

Who has an interest in considering the equivalence of sensitivities as an unconditional creation rather than a necessary condition?
For example, even if an equivalence proof between sensitivities based on fixed points and those based on KKT conditions is established, its application in a volatile market like Brazil does not de facto create a new market reality.
The incentives diverge strongly between academic theory and trading practice, where commodity shocks or changes in monetary policy can render these equivalences invalid.
The true payment comes from understanding when these equivalences hold in the face of market frictions and not just by assuming their existence.
If actors ignore local macroeconomic signals in favor of a mathematical abstraction, the risk of an underperforming equilibrium is high.