Читать книгу Understanding Systemic Risk in Global Financial Markets - Gottesman Aron - Страница 11

As previously mentioned, systemic events have been occurring for centuries and with devastating impact. Using events such as the Great Depression and the Credit Crisis as just two examples, both events led to the failure of hundreds of banks and other financial institutions in the United States and globally, deep and long-lasting global recessions, the seizing up of global credit markets, the need for massive government bailouts, and a tremendous loss of jobs in the private sector that in turn led to significant spikes in personal bankruptcies.

As we cover in more detail later in this book, there have been a multitude of causes for such events, many of which are extremely complex for several reasons. For example, what differentiates systemic risks from the more traditional forms of risk is that the former are typically classified by their impacts as opposed to their causes. Systemic risks can arise in many forms, can develop rapidly, and can be unpredictable. Another major difference is that systemic risk can involve interconnectedness of markets and industry participants, rather than a single, discrete source of risk. By its nature, systemic risk is also an extremely broad topic, subject to many different definitions, sources, and impacts. One of the reasons that systemic risk analysis has not yet evolved into a standard component of risk management practices in the financial industry is the lack of a roadmap that summarizes these many components and available tools to help support repeatable identification and monitoring processes.

Because of these significant challenges, and in consideration of the devastating effect systemic events have been shown to have on global economies, it is imperative that such risks become better understood and monitored so there is a greater likelihood they can be detected early to protect global financial institutions, the stability of financial markets, and individual taxpayers.

If history is any indicator, it is unlikely that all or even many future systemic events can be predicted ahead of time. That said, given the significant amount of data and other facts available concerning the root causes of the Credit Crisis and other financial events, this information has proven to be very helpful in the creation of models and other tools that may serve as early warning indictors in the future. In addition, as covered in detail in the second half of this book, new financial regulations have been enacted in the United States and internationally at a rate not seen since the Great Depression. Multiple new regulatory bodies and agencies have been created globally to oversee and enforce these new rules, most of which are aimed at the banking industry. In addition, financial institutions have vastly expanded their focus on systemic risk identification and mitigation.

While this clearly heightened global focus on systemic risk is certainly encouraging, the analysis and quantification of systemic risk remains a relatively nascent area. There is still a need for new and enhanced tools to assist the industry in its efforts to better understand, quantify, monitor, and mitigate systemic threats. While longstanding risk management disciplines such as credit risk, market risk, liquidity risk, and operational risk are all critically important pillars of the risk governance frameworks employed by nearly all large financial institutions, systemic risk warrants acceptance in the industry as a distinct risk discipline that can be monitored and managed in an organized fashion.