Talk:Systemic risk

message: In the intro it states: "Systemic Risk" adds the important problem that it is much more difficult to evaluate than "systemic risk".
I think that should be more difficult to evaluate than "idiosyncratic risk" or "non-systemic risk"?
Jfrumar (talk) 03:47, 28 July 2008 (UTC)
thread_title: Intro error?

message: In understanding 'systemic risk' and who knows enough to understand it,
it is instructive to review the AIG situation.
Today, all agree that AIG collapse proposed a 'systemic risk', but during
the AIG crisis, no one understood that, including all US Govt leaders, 
UNTIL they were taught that AIG proposed a 'systemic risk'.
The situation at AIG involved a liquidity crisis, and AIG had hired JP Morgan
and Goldman Sachs to lead in finding a loan to allow AIG to bridge its liquidity 
crisis. And after several weeks of attempting to arrange a loan for AIG, JP Morgan
and Goldman Sachs were unable to do so.
Then AIG, as reporpted widely in NYC newspapers, approached the US Federal Reserve
asking for a 35-45 billion bridge loan. 
Then, it was also widely reported in NYC newspapers, that Timothy Geitner, then
president of the NY Federal Reserve, loudly announced he turned AIG down and would
not loan AIG anything.
At that point, the White House, The US Treasury & Henry Paulson, and Ben Bernanke
were all taught facts they did not know - that AIG had insured 100's of billions
of Mortgages and also had insured trillions of derivatives, and that allowing AIG 
to collapse would cause widespread market disruptions leading to a global market collapse.
(This input did not come from AIG and came from a private party.)  —Preceding unsigned comment added by 69.121.221.97 (talk) 13:06, 11 April 2009 (UTC)
thread_title: Systemic Risk, AIG and Babble

message: I disagree with the claim above. In 2007-08 central bankers have specifically justified their radical interventions in the market on the grounds that failures of some important institutions (e.g. Bear Stearns) threatened systemic risk. What they meant was that the failure of one institution could threaten the stability of the financial system as a whole (i.e. cause many other collapses). That's a very different meaning from saying that some large risk is undiversifiable (i.e. uninsurable). Risks that are too big to insure away (but which do not necessarily threaten the survival of the financial system) are sometimes called aggregate risks or perhaps sometimes systematic risks.  If they are called 'systemic risks' that sounds like a misnomer to me, because 'systemic risk' is the usual term, to the best of my knowledge, for risks that threaten to propagate from one institution to another and bring down the system. 
Therefore I would suggest completely rewriting this page to focus on risk of financial collapse. If people can find references to 'systemic' used as a synonym for 'aggregate', then it would be appropriate to mention both meanings. --Rinconsoleao (talk) 17:36, 21 July 2008 (UTC)
thread_title: Wrong definition

message: In my Finance textbook, it says systematic risk, not systemic, what's the difference? --70.111.218.254 00:25, 3 December 2006 (UTC)
thread_title:  Systemic vs. Systematic 

message: " Systemic risk should also be carefully distinguished from Non-systemic risk, which describes risks which the whole economy faces such as business cycles or wars."
Is this correct? My understanding is that Systemic/Systematic risk relates to events that affect every asset in a market. This would include wars and business cycles. Non-systemic/Unsystematic risk relates to events that affect a specific company. For instance, a large fire at a company's factory (which would obviously be catastrophic to that company, but not to every company in the market.)
:The first reference cited helps here: "Systemic risk refers to the risk or probability of breakdowns in an entire system, as opposed to breakdowns in individual parts or components, and is evidenced by comovements (correlation) among most or all the parts." it says.
:Wars can be beneficial to certain sectors (I am not propagating the "war economy" hypothesis here, but still, there are certain industries/entities which stand to gain from violent conflicts). Business cycles are very industry specific and while there is correlation among sectors it is not always overbearing. For example, the cycles in consumer electronics' sales will be independent of oil industry cycles outside of some minimal (read negligible) correlation.
:Hence systemic risk is what is left after all the cycles and inter-industry correlations are factored. One might even go as far as saying that systemic risks can only be worsened, not mitigated. What we have at the moment, with imminent collapse of financial giants is market risk, credit risk etc. Systemic risks are those that are posed by the problems in the overall economy of USA and perhaps the world at large. Nshuks7 (talk) 10:47, 16 September 2008 (UTC)
thread_title:  Systemic vs. Non-Systemic 

message: Anyone could explain clearly what is the difference between Market risk and systemic risk? They seem to be exactly the same thing to me but two different articles exist... Why? --Bombastus 11:36, 2 October 2007 (UTC)
replies: text: Systemic and Market risks are different in (1) source of risk (2) mitigation. Market risk (1) arises from any single investment and (2) can be mitigated using appropriate hedges. Both references on the Market Risk pages talk about mitigation of this risk. Systemic Risk (1) arises from the economy in general and (2) cannot be mitigated. Read http://web.mit.edu/alo/www/Papers/EcRev2007.pdf for more on how hedge funds increase systemic risk. I hope this answers your question. There might be other distinctions as well. Nshuks7 (talk) 10:36, 16 September 2008 (UTC)
thread_title:  Market risk 

message: * Algorithmic trading should be higlighted as a source of systemic risk.
* Regulations should be elaborated as a source of systemic risk
* How hedge funds lead to increase in systemic risk should be highlighted.
Other than this, there have been a lot of discussions by the Fed and in other countries about systemic risks. These should be discussed in a new section. 203.197.5.8 (talk) 10:23, 19 September 2008 (UTC)
thread_title: Specific sources of systemic risk

message: As lots of comments above have noted, systemic risk and systematic risk are different concepts and need separate articles. I've created them, though systematic risk is pretty stubby. JQ (talk) 11:50, 26 November 2008 (UTC)
thread_title: Systemic and systematic risk

message: Comment moved from article by - 2/0 (cont.) 17:15, 23 November 2009 (UTC)
thread_title:  Definition? 

message: The second paragraph in the "Explanation" section is not appropriate for this article. Whatever opinion the author might have had about how the financial crisis was handeled, it doesn't pertain the article on systemic risk.
"However, in practice, policy makers often appear to favor certain financial institutions at the expense of others." This statement and the paragraph that follows is opinion and unrelated to any explanation of systemic risk. Whether you think the government favored some banks or not, it does not add value to this article and merely presents an unecessary bias. Personally, I think this paragraph should be deleted. I disagree with the claims and I think the argument is superficial and over simplified. However, I would also be in favor of moving it to another article specifically dealing with the financial crisis or public opinion on the handeling of the crisis.  —Preceding unsigned comment added by Adefeowiki (talk • contribs) 12:01, 5 November 2010 (UTC)
thread_title:  Opinion and Conjecture 

message: It seems this reference comes and goes from the article, not sure why?
 	
Zeyu Zheng, Boris Podobnik, Ling Feng and Baowen Li, "Changes in Cross-Correlations as an Indicator for Systemic Risk" (Scientific Reports 2: 888 (2012)).
On quick review its seems relevant to systemic risk, authored by academics, published in a ref journal, partially sponsored research by http://www.futurict.eu/. 
The article is quite technical and quantitative. If its not relevant here there should be a legitimate reason why. Rick (talk) 19:28, 1 July 2013 (UTC)
thread_title: Zheng, Feng, Li (2012)

message: Hello fellow Wikipedians,
I have just modified one external link on Systemic risk. Please take a moment to review my edit. If you have any questions, or need the bot to ignore the links, or the page altogether, please visit this simple FaQ for additional information. I made the following changes:
*Added archive https://web.archive.org/web/20090305000018/https://www.newyorkfed.org/registration/research/risk/Daula_slides.ppt to https://www.newyorkfed.org/registration/research/risk/Daula_slides.ppt
When you have finished reviewing my changes, you may follow the instructions on the template below to fix any issues with the URLs.
Cheers.—InternetArchiveBot (Report bug) 16:56, 20 December 2017 (UTC)
thread_title:  External links modified 

message: To someone who works in this area, the choice of references in this section seems odd as does the long discussion which authors knew or did not know about each others' works. For example, I am not sure that general readers will be interested in the question of when Elsinger came to know about Suzuki's paper. More importantly, the key structural interconnectedness papers, papers with thousands of citations, are never cited in this article, while papers with less than 50 cites are discussed in detail. I would like to edit to add citations for Cifuentes, Ferrucci, aand Shin (2005, JEEA), Glasserman and Young (JBF, 2015), and Acemoglu, Ozdaglar, and Tahbaz-Salehi (AER, 2015) and cut the discussion of who know about Suzuki's paper (but keep the reference to this paper). Any objections?
Scholaris rerum obscurarum (talk) 14:30, 15 December 2019 (UTC)
thread_title:  Referencing in "Structural models under financial interconnectedness"