TY  - CHAP
AB  - Abstract Standard financial risk management practices proved unable to provide an adequate understanding and a timely warning of the financial crisis. In particular, the theoretical foundations of risk management and the statistical calibration of risk models are called into question. Policy makers and practitioners respond by looking for new analytical approaches and tools to identify and address new sources of financial risk. Financial markets satisfy reasonable criteria of being considered complex adaptive systems, characterized by complex financial instruments and complex interactions among market actors. Policy makers and practitioners need to take both a micro and macro view of financial risk, identify proper transparency requirements on complex instruments, develop dynamic models of information generation that best approximate observed financial outcomes, and identify and address the causes and consequences of systemic risk. Complexity analysis can make a useful contribution. However, the methodological suitability of complexity theory for financial systems and by extension for risk management is still debatable. Alternative models drawn from the natural sciences and evolutionary theory are proposed.
VL  - 96
SN  - 978-1-78441-027-8, 978-1-78441-026-1/1569-3759
DO  - 10.1108/S1569-375920140000096001
UR  - https://doi.org/10.1108/S1569-375920140000096001
AU  - Mertzanis Charilaos
PY  - 2014
Y1  - 2014/01/01
TI  - Complexity Analysis and Risk Management in Finance
T2  - Risk Management Post Financial Crisis: A Period of Monetary Easing
T3  - Contemporary Studies in Economic and Financial Analysis
PB  - Emerald Group Publishing Limited
SP  - 15
EP  - 40
Y2  - 2024/04/25
ER  -