Systemic risk and financial regulations: A theoretical perspective
Robert Prasch and
Thierry Warin ()
Journal of Banking Regulation, 2016, vol. 17, issue 3, 188-199
This article inserts the notion of systemic risk into the theoretical foundations of modern finance. By systemic risk, we mean risks because of interdependence among leading firms, in other words complexity. It builds upon the traditional mean-variance approach while reconsidering an inadequately contemplated source of risk: the actual organization of the financial market. As such, we take seriously the idea that some oligopolistic firms may be understood by market participants to be central to the fabric of modern financial markets, and in that sense can be deemed too big to fail. While we believe that much of traditional financial analysis is valid in its own terms, we also believe that important insights can be acquired from melding Modern Portfolio Theory with recent developments in Industrial Organization.
References: Add references at CitEc
Citations Track citations by RSS feed
Downloads: (external link)
http://www.palgrave-journals.com/jbr/journal/v17/n3/pdf/jbr20154a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/jbr/journal/v17/n3/full/jbr20154a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pal:jbkreg:v:17:y:2016:i:3:p:188-199
Ordering information: This journal article can be ordered from
Access Statistics for this article
Journal of Banking Regulation is currently edited by Dalvinder Singh
More articles in Journal of Banking Regulation from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla ().