Systemic Risk Centre

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    Brexit will probably cause disruption in markets, but systemic risk is unlikely

Brexit will probably cause disruption in markets, but systemic risk is unlikely

With less than two years until Britain leaves the EU, the implications of Brexit for financial stability are of some concern. Two key central bankers have reached opposites conclusions, with Mark Carney worried and Mario Draghi more sanguine. Broadly in line with Draghi, we think Brexit should mostly decrease systemic risk, albeit with a potential for an increase.

Brexit will […]

Managing risk in the age of disruption

The context of risk management and risk preparedness has changed in recent years.

Structural disruption

We are living through a period of multi-dimensional disruption that is often dubbed as the fourth industrial revolution. Developments in extreme connectivity and extreme automation have consequences beyond the world of technology: business models, industries, markets, regulatory, and governance regimes have been thrown into a flux. […]

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    Geekland: STEM knowledge is needed to apply for 1 in 6 non-tech UK jobs

Geekland: STEM knowledge is needed to apply for 1 in 6 non-tech UK jobs

In the UK, less than half of science, technology, engineering, and mathematics (STEM) graduates work in so-called ‘STEM occupations’ (such as scientists or engineers). If, as is often thought, all recruiters in ‘non-STEM’ occupations (for example, graphic designers or economists) neither require nor value science and technology skills, and simply like hiring science graduates for their problem solving and […]

Low volatility makes a financial crisis more likely

Received wisdom maintains that financial market volatility has a direct impact on the likelihood of a financial crisis. Perhaps the best expression of this is Hyman Minsky’s (1992) hypothesis that economic agents observing low financial risk are induced to increase risk-taking, which in turn may lead to a crisis. This is the foundation of his famous statement that ‘stability […]