They are size; substitutability, or the degree to which other companies could provide the same service if a firm left the market; and interconnectedness, or linkages that might magnify a company's financial distress and cause that distress to spread through the financial system.
Jones: The global interconnectedness of markets is what makes this bear market so different, and frankly more difficult than others I've experienced.
I duly do my job, offering macroeconomic projections with a sprinkling of social unrest, political volatility, international interconnectedness and market pressure.
The committee's report said the growing dominance of high-frequency and algorithmic traders had made markets fragile and emphasized the increased interconnectedness between equities and derivatives markets, which could transfer sharp swings in one market to the other almost instantaneously.
Since the financial crisis, Dimon has asserted that it's the interconnectedness of markets — the tendency of investors to flee from one vulnerable asset class and then another — rather than the size of banks that presents the greatest systemic threat.
The bottom line is that the interconnectedness of markets, currencies, trade, supply chains and economies is creating more meaning, data usage, transparency and an ability to become predictive.
And new rules and greater scrutiny for the over-the-counter derivatives market, one source of the interconnectedness that made Lehman's failure so painful over and above its size, were overdue.
Libor rate rigging is a dangerous externality of the increasing interconnectedness of global markets.
Iceland's current woes teach a useful lesson about the interconnectedness of global markets: trouble can come from anywhere.
The very interconnectedness of world markets may, however, make things worse – the collapse of food production across Europe, parts of North America and perhaps elsewhere, could result in global shortages which in turn would drive a dramatic rise in the cost of food commodities.
