The human factor and systemic risk: a memento

• Main Author: M. SARCINELLI
• Format: Article
• Language: English
• Published: Associazione Economia civile 1997-09-01
• Series: PSL Quarterly Review
• Subjects: Financial crises; systemic risk; globalisation; risk containment
• Online Access: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10578/10462

Charles Kindleberger once described international financial crises as an “evergreen”. Indeed, looking back over the last 400 years it is hard not to get a sense of their regularity or invincible fate. However, the current structural market transformations taking place in the wake of globalisation call for an analysis of the fresh roots of that “evergreen” of systemic risk. The author offers some semantic and theoretical premises before looking into the role of the human factor in the prevention and control of a crisis from spreading from an isolated case to the system as a whole. Cases are described in which organisational consistency and the quality of corporate governance, shared purposes and a common culture, and sufficient transparency are important to containing systemic risk and curbing panics.