“They’re going to lose their houses, they’re going to lose their jobs…this is like, the end of capitalism, this is like the dark ages all over again” – The Big Short
Debuting in 2015, The Big Short is an American comedy-based drama showcasing the 2007-2008 financial crisis. I remember watching the movie, in quiet disbelief that a financial failure of such magnitude slipped through all areas of caution, potential management, and mitigation.
The 2008 financial crisis was the result of unsuccessful systemic risk management.
A crisis that the Federal Reserve Board estimated to have cost every single American ~$70,000.
In this Process Street article, we will explain what systemic risk is and how it differs from conventional risk. You are given tips to help you identify prevailing systemic risks so you can be proactive, plan for, and manage these risks for your business and line of work.
Before concluding the article, we acknowledge climate change as a potent systemic risk that urgently needs to be addressed and managed. For this, we give you free template resources, uniquely designed to support the movement towards business sustainability. A movement that runs hand-in-hand with carbon footprint reduction.
Click on the relevant subheader below to jump to that section. Alternatively, scroll down to read all we have to say about systemic risk.
- Risk management: Conventional risk vs systemic risk
- Systemic risk: An explanation for the concept
- Systematic risk: The difference and its relation to systemic risk
- Systemic risk examples
- Identifying systemic risk elements: Too big to fail, too interconnected to fail
- Systemic risk mitigation: Approaches to managing systemic risk
- Global systemic risks of today, a new challenge
- Climate change as a systemic risk
- Using Process Street to become more sustainable, mitigating against climate change
Let’s get started!