“Complexity, Concentration and Contagion”:: Andy Haldane & Bank of England making progress


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We should all be grateful that “thinkers” like Andy Haldane are in positions of influence. The only problem being that, at the current rate, YET AGAIN, we stand to learn the most painful of lessons after-the-event instead of embracing tools that can provide crisis anticipation or “anticipatory awareness” to (if not avoid) then mitigate the impact of contagion.

The excellent author, Mark Buchanan, recently wrote:

Over the past three decades, the global financial system has become more dynamic and interconnected, more concentrated and complicated than ever before. Financial engineering seems to know no limits to creating new instruments that link institutions in new ways.

Is that a good thing? Or could the resulting financial network be too complex? Or, perhaps, complex in the wrong way?

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