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The toxic ingredients that led to that Wall Street firm's implosion are abundant in the Gulf of Mexico disaster: flawed risk management, systemic hazard and regulatory incompetence.
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There is a compelling reason to go beyond the individual and consider systemic hazards that arise from sociotechnical system attributes or functions that are organisational in nature.
Such deviations may signal new systemic hazards such as failure or error in a particular clinical IT system, as well as help study how such hazards evolve over time.
The new law established a 10-member Financial Stability Oversight Council to look out for financial institutions that pose systemic hazards to the economy.
The Deal Professor takes the opportunity to consider what Bear's downfall says about moral hazard, systemic risk and corporate governance.
These included: reduce systemic risk; mitigate moral hazard; reduce the likelihood and impact of bank failure; shrink subsidies to investment banks; and increase competition in retail banking.
It goes back at least to 1802, when Henry Thornton (The Nature and Effects of the Paper Credit of Great Britain) clearly discussed the "moral hazard" and "systemic risk," as we now call them, involved.
We propose three themes for thematic focus: systemic risk and natural hazards; sustainability science; and adaptive governance.
However, Chapter 14 would prohibit bankruptcy judges from making decisions based on either a need to reduce systemic risk or minimize moral hazard.
Financial regulation is well justified by the market failures stemming from moral hazard, asymmetric information, and systemic risk.
Traditionally the advocates of globalism have claimed that a universal system of laissez-faire in finance spread systemic risk more ably around the system, smoothing out the fluctuations and hazard caused by inadequate local assessment of liability and risk.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com