It starts with the definition. Systemic Risk is the risk inherent to an entire market or market segment, so says one website. From the definition, we can already see that systemic risk is primarily concerned with the prevention of risks to The System. The System in question is the global financial "system." So the goal of Systemic Risk is the prevention of loss to those involved in The System.
You might ask, "why is Adler focusing on the obvious?" Well, I don't think it is that obvious who The System is and what their interests are. There are lots of well meaning people running around trying to craft new laws and methodologies to assess and prevent Systemic Risk. Most of them will fail without first understanding the needs and interests and goals of The System.
The Goal of every System should be to serve the needs and interests of The Customer. Corruption of The System is when individuals or groups place the needs of themselves as actors in The System above the needs of The Customer. When The System is mostly serving the needs of itself, it is mostly corrupt.
The Global Financial System has had corruption for decades. In the last decade, the influence of Systemic Actors exercising the needs of themselves over the needs of The Customer has become acute. The Financial Meltdown of the past 30 months is the result of this imbalance.
So I wonder, which new brew of experts and which new conference will measure the needs of The System and compare them to the needs of The Customer to assess Risk?
I have a self-serving answer:
Amazon has some Information Governance problems.
A week ago, I placed a large order of Nerf Guns that Amazon keeps refusing to process. My kids love these things and I guess some adults I know kind of like them too. We're all heading out to my sister's house in Point Reyes for Christmas this year and a combined Family Reunion. Both my sisters will be there with 7 kids in a medium-sized house for four days and the best we could all come up with to keep them occupied was felt-warfare among the tall grasses of the Inverness wetlands.
If only Amazon would cooperate.
I have no desire to carry ten Nerf weapons on trans-continental jets. I can see explaining to turgid DHS officials why a family of four needs automatic-nerf canons with heat-seeking velcro missiles. So, I prefer to order them online and let Fedex make the arms shipments discretely.
But my order is stuck in Amazon credit card limbo. It seems that the last time I bought something and shipped it to my sister instead of my home address I used a credit card which expired in May. Problem is, Amazon somehow associates that credit card with my sister's mailing address. I've deleted it in my online account, and I buy things from them all the time with the current card, but Amazon hasn't purged this relationship.
From an Information Governance perspective, what kind of problem is this? It is of course a Data Quality issue, but normal DQ tools might have a hard time with rules matching in this case. My gut is that Amazon just doesn't sweep and purge their accounts for outdated credit cards. Its pretty frustrating as a consumer, especially during these busy days. Some records management would solve that problem, but by now the point is moot for me. I just don't have the time or patience to bother fixing their sloppy Information Governance issues.
Fortunately, Walmart sells Nerf Guns too...
It is that simple.
You have supply chains that deliver toys from manufacturers in China to sit under Christmas trees in Canada, oil and gas from Russia to factories and homes in Germany, Diamonds from mines in Namibia to jewelers in New York.
Real World supply chains keep the global Industrial Economy running.
Alongside, you have Information Supply Chains that deliver crop yields to traders on the Chicago Mercantile exchange, raw video footage from journalists in Afghanistan to news desks London, Paris, and Atlanta, and sales performance reports from branch offices in Omaha to main offices in Arkansas.
Around the world, Information Supply Chains drive the Knowledge Economy.
They need to be Smart - Instrumented, Monitored, Measured, and Coordinated. And we need to be aware of when they are designed, what flows through them, and how we can improve them.
Without awareness, Governance itself can never be very Smart. It is that simple.