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Complexity As A Catalyst Of Market Failure: A Law And Engineering Inquiry, Steven L. Schwarcz
Complexity As A Catalyst Of Market Failure: A Law And Engineering Inquiry, Steven L. Schwarcz
Steven L Schwarcz
This article examines how the complexities of modern investment securities and the assets underlying them can trigger a breakdown of financial markets and also analyzes what should be done to mitigate the potential for market failure. Because these complexities are characteristic of complexities in nonlinear engineering systems, the article’s analysis draws on the literature analyzing these systems.
Complexity As A Catalyst Of Market Failure: A Law And Engineering Inquiry, Steven L. Schwarcz
Complexity As A Catalyst Of Market Failure: A Law And Engineering Inquiry, Steven L. Schwarcz
Steven L Schwarcz
This article examines how the complexities of modern investment securities and the assets underlying them can trigger a breakdown of financial markets and also analyzes what should be done to mitigate the potential for market failure. Because these complexities are characteristic of complexities in nonlinear engineering systems, the article’s analysis draws on the literature analyzing these systems.
Complexity As A Catalyst Of Market Failure: A Law And Engineering Inquiry, Steven L. Schwarcz
Complexity As A Catalyst Of Market Failure: A Law And Engineering Inquiry, Steven L. Schwarcz
Steven L Schwarcz
This article examines how the complexities of modern investment securities and the assets underlying them can trigger a breakdown of financial markets and also analyzes what should be done to mitigate the potential for market failure. Because these complexities are characteristic of complexities in nonlinear engineering systems, the article’s analysis draws on the literature analyzing these systems.
Systemic Risk, Steven L. Schwarcz
Systemic Risk, Steven L. Schwarcz
Steven L Schwarcz
Governments and international organizations worry increasingly about systemic risk, under which the world’s financial system can collapse like a row of dominoes. There is widespread confusion, though, about the causes and even the definition of systemic risk, and uncertainty about how to control it. This article offers a conceptual framework for examining what risks are truly “systemic,” what causes those risks, and how, if at all, those risks should be regulated. Scholars historically have tended to think of systemic risk primarily in terms of financial institutions such as banks. However with the growth of disintermediation, in which companies can access …