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Part of the problem lies in the nature of catastrophic events. They have an unnerving habit of striking when and where you least expect it: where, QED, in places your telescopes and search beams are ''not'' pointed. The most successful firms on the street (LTCM, Enron) the chairman of the NASDAQ (Bernie Madoff). A sleepy benchmark interest rate-setting process managed by the dear old British Bankers’ Association (LIBOR). A Family Office running its own money and borrowing in a secured, margined basis (Archegos). Flighty bank depositors (SVB, Signature) | Part of the problem lies in the nature of catastrophic events. They have an unnerving habit of striking when and where you least expect it: where, QED, in places your telescopes and search beams are ''not'' pointed. The most successful firms on the street (LTCM, Enron) the chairman of the NASDAQ (Bernie Madoff). A sleepy benchmark interest rate-setting process managed by the dear old British Bankers’ Association (LIBOR). A Family Office running its own money and borrowing in a secured, margined basis (Archegos). Flighty bank depositors (SVB, Signature) | ||
They also have an unnerving habit of happening very quickly and uncontrollably. They have the characteristic of “normal accidents”, so named by Charles Perrow in his {{Br|Normal Accidents: Living with High-Risk Technologies}} | They also have an unnerving habit of happening very quickly and uncontrollably. They have the characteristic of “normal accidents”, so named by Charles Perrow in his {{Br|Normal Accidents: Living with High-Risk Technologies}}: that is, a distributed system displaying a combination of non-linear, [[complex]] interactions and “[[tight coupling]]", where chain reactions are easy to set off and hard to stop. In systems of this kind, Perrow thought catastrophic accidents were not just likely but, from time to time, ''inevitable''. Such unpredictable failures are an intrinsic property of a complex, tightly coupled system, not merely a function of “operator error” that can be blamed on a negligent employee — although be assured, that is how management will be inclined to characterise it if given half a chance. | ||