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The lines of defense against a systemic financial crisis


PI Member
Oct 30, 2015
Credit Institutions. ..Insurers...and Capital Market Organisations have all had a nasty habit of going crash-bang-wallop for decades now...and indeed in centuries past

Often The State picks up the tab, which is wrong...but often the least worst option after a crash

So where should the lines of defense be ?

1) The staff of the Institution
2) The executive management
3) The board
4) The auditors
5) The shareholders
6) Other sources of corporate finance
7) Capital Markets Investment Banks
8) The regulators
9) Government
10) Civil society

I'd also have a mythical entity the 'Counterparty Risk Assessment Bureau' between each step 2-8...but more on that in another thread

Too much focus has been on 4 and 8 above

More focus is needed on the roles of 3 and 5

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