Economia Moral Crisis of global capitalism / XXI Soros proposed an economic recovery program in July Boltvinik Having postulated hypothesis on the superburbuja of credit expansion, which would have accelerated since 1980 and was deflated after the outbreak of the mortgage bubble, it which analyze the delivery of 29/05/09, Soros address other issues in the book The Crash of 2008 and What it Means (second enlarged edition, New York, 2009) I have examined, including: a financial-economic view story from their perspective wildcatter The easiest way to understand the systemic risk is the inverse of a protective policy. Just as governments and institutions that monitor the markets established policies and rules to safeguard the interests of market participants, all participants are intertwined in a network of branches which arise from exposure to share the same economic factors, and are under control of the same regulatory mechanisms.
Systemic risk should not be confused with market risk, because the latter is specific to the item you wish to buy or sell. This type of risk can be mitigated. For example, consider a perfectly balanced portfolio of investments, and diversify. In this case we can say that the market risk has been canceled. However, if a recession occurs and the general market collapses, this diversification could be of little importance. This is the systemic risk of the portfolio.
The essence of systemic risk is the correlation of losses. Systemic risk is the problem that is difficult to assess. For example, while the estimates and research in the cycles of various industries provide important information for predicting recessions, the risk information system is usually very difficult to obtain because the interdependencies in the financial markets play a crucial role. If a bank bankruptcy and must sell all its assets, the drop in the prices of these assets may lead to liquidity problems for other banks, thereby creating panic in the interbank system.
A frequent concern is the potential fragility of some financial markets. If participants traded at levels of their capital bases, the failure of any party can deprive the other of liquidity, and produce a domino effect that sets the whole market systemic risk .