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34  Including measures of banks’ Conditional VaR or CoVaR (NYU Stern School of Business (2009), and Brunnermeier et al (2009)). These are statistical measures of an institution’s VaR conditional on other institutions in the network simultaneously facing stress. 35  Simon (1962). BIS Review 53/2009  15  The answer lies in the structure of complex systems. Hora’s watches are designed as ten sub-assemblies each comprising ten elements, which are combined into ten larger subassemblies, ten of which then constitute a whole watch. Tempus, by contrast, assembles his watches part by part. The result is that, whenever Tempus is interrupted – in Simon’s parable by a telephone call ordering more watches – his work is lost and he must start again. Hora suffers the same fate much less frequently, due to the sub-assembly structure of his watches. The differences in the robustness of these equally complex structures are dramatic. If the probability of interruption is 0.01, Hora will complete 9 watches for every 10 attempts. By contrast, Tempus completes 44 watches for every million attempts. The probability of horological collapse is lowered from 0.999956 to 0.1. The secret of the structure of Hora’s complex watches is that they are “hierarchical”, with separate and separable sub-structures. Simon discusses how a number of other networks, both social and physical, exhibit this hierarchical structure. This is no evolutionary accident. For many networks, hierarchy emerges naturally. It is the product of a process of Darwinian selection in which it is only the hierarchical structures that survive to maturity.