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Where the Risks Lie: A Survey on Systemic Risk

Author

Listed:
  • Sylvain Benoit
  • Jean-Edouard Colliard
  • Christophe Hurlin
  • Christophe Pérignon

Abstract

We review the extensive literature on systemic risk and connect it to the current regulatory debate. While we take stock of the achievements of this rapidly growing field, we identify a gap between two main approaches. The first one studies different sources of systemic risk in isolation, uses confidential data, and inspires targeted but complex regulatory tools. The second approach uses market data to produce global measures which are not directly connected to any particular theory, but could support a more efficient regulation. Bridging this gap will require encompassing theoretical models and improved data disclosure.

Suggested Citation

  • Sylvain Benoit & Jean-Edouard Colliard & Christophe Hurlin & Christophe Pérignon, 2017. "Where the Risks Lie: A Survey on Systemic Risk," Review of Finance, European Finance Association, vol. 21(1), pages 109-152.
    • Handle: RePEc:oup:revfin:v:21:y:2017:i:1:p:109-152.
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    More about this item

    Keywords

    Financial Crises; Financial Risk and Risk Management;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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