Issue Number One: Systemic Risk

Issue Number One: Systemic Risk

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January 2011: Systemic risk has become a central topic of expert discussion and political debate amidst the financial crisis that began in 2008, but it also has resonances across many other domains in which catastrophic threats loom – including internet security, supply chain management, catastrophe insurance, and critical infrastructure protection. In this issue, we invited scholars to contribute genealogical and conceptual framings that inform critical inquiry into this increasingly important concept. The result is not a traditional collection of academic articles but a set of brief, preliminary reflections, prepared on short notice, that address a common set of questions, along with a handful of documents, links, images and videos that illustrate different aspects of the concept.

Contributors: Benjamin Sims, Deborah CowenMyriam Dunn CaveltyElizabeth Cullen DunnChristopher M. KeltyPhilip BougenStephen J. CollierAndrew LakoffOnur OzgödeDouglas R. HolmesRebecca LemovBrian LindsethMartha PoonGrahame Thompson

Introduction: Systemic Risk

This LIMN examines the concept of systemic risk. Systemic risk has become a central topic of expert discussion and political debate amidst the financial crisis that began in 2008, but it also

Systems at Risk as Risk to the System

Systemic risk in finance refers to at least three things, according to George G. Kaufman and Kenneth E. Scott: It connotes a macro shock that produces nearly simultaneous, large, adverse effects in most or

Systemic risk in consumer finance

At the end of the great credit bubble there was still a tremendous amount of borrowing potential in the hands of consumers.  Of the $5 trillion in US credit card lines outstanding only $800 billion was

Uncertain about risk

It was hard not be impressed with how this simple chart summarized the course of an astoundingly complex historical event

Logistics’ Liabilities

In the midst of crisis, public debate about the future of the economy has largely focused on the systemic vulnerability of finance systems. Yet, a different kind of concern with systemic economic risk has

How W32.stuxnet works

Symantec security response demonstrates how to hack a nuclear power plant. Read their report.

The Morris Worm

The Morris worm was released in November of 1988.  It was launched surreptitiously from an MIT computer by graduate student Robert Tappan Morris at Cornell University, and spread to internet-connected computers running the BSD variant of

Complexity, Ecology, Finance

Andrew Haldane, Senior Bank of England official, has called for more ecology in the study of finance (read his report). A Financial Times Article reports and offers analysis by prodigal anthropologist Gillian Tett (and co-authors).

The Pre-History of Resilience in Ecological Research

The notion of resilience has become increasingly salient in recent decades in fields ranging from public health preparedness to critical infrastructure protection. As Benjamin Sims has noted, the use of the concept of resilience to

System Vulnerability and the Problem of National Survival

In a 1962 lecture to the War Industrial College, the Director of the US Office of Emergency Planning (OEP), Edward McDermott, described his agency’s mission. Charged with preparing the nation for nuclear war,

Systemic Financial Risks and How to Cope With Them

by: Grahame Thompson, Open University and Copenhagen Business School

According to Michael Woodward (2009) modern macroeconomics has seen a convergence of views centred around the ‘efficient market hypothesis’ (EMH). This theoretical position posits that all unfettered markets clear continuously