An insight gained from reason and diverse experience with closely meshed systems; system understood here as a network of individual components that together form a purposeful, interrelated and interdependent unit, such as the financial system. The law is usually expressed in the sentence: “Whatever can go wrong, will go wrong. Behind this statement, which at first glance appears to be a joke, lies the fact that – without appropriate safeguards – in all systems the failure of just one single link can very quickly lead to the collapse of the entire structure. – Applied to the financial market, this means that effective steps to avoid undesirable developments (defect prevention) must be planned and implemented from the outset through appropriate precautions by policymakers, supervisory authorities and the central bank. – See crash, domino effect, earnings weakness, extreme event, negative, financial market interdependence, financial market shock, crisis, systemic, liquidity crisis plan, market risk stress test, panic selling, risk, risk-bearing capacity, run, rush to the exit, shock, external, sensitivity analysis, stability and growth pact, stress test, volatility, worst case scenario
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/