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Normal Accidents: Living with High-Risk Technologies: Difference between revisions
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Is a financial system [[complex]]? About as complex as any distributed system known to humankind. Is it tightly coupled? Well, you could ask the principals of [[LTCM]], [[Enron]], Bear Stearns, Amaranth Advisors, [[Lehman]] brothers or Northern Rock, if any of those venerable institutions were still around to tell you about it. But yes. Might reckless mortgage securitisation, excess [[leverage]] and flash boys have been on Perrow’s mind? We rather think so: | Is a financial system [[complex]]? About as complex as any distributed system known to humankind. Is it tightly coupled? Well, you could ask the principals of [[LTCM]], [[Enron]], Bear Stearns, Amaranth Advisors, [[Lehman]] brothers or Northern Rock, if any of those venerable institutions were still around to tell you about it. But yes. Might reckless mortgage securitisation, excess [[leverage]] and flash boys have been on Perrow’s mind? We rather think so: | ||
{{quote|“New financial instruments such as [[Financial weapons of mass destruction|derivatives]] and [[hedge fund]]s and new techniques such as | {{quote|“New financial instruments such as [[Financial weapons of mass destruction|derivatives]] and [[hedge fund]]s and new techniques such as programmed trading further increase the complexity of interactions. ''Breaking up a loan on a home into tiny packages and selling them on a world-wide basis increases interdependency.''”<ref>{{br|Normal Accidents}} p. 385.</ref>}} | ||
He wrote this in ''1999'', for Pete’s sake. | He wrote this in ''1999'', for Pete’s sake. | ||