Endogenous, Exogenous And Existential Risk – New Global Solutions

ABSTRACT

Countries can be assisted through a separate 'Financial Investment, Regulatory, Social and Technology' (FIRST) agenda with emerging markets benefiting from a dedicated 'Sustainable Assistance Finance and Engagement' (SAFE) program with climate protection secured through a parallel 'Sustainable Assistance and Value Enterprise' (SAVE) agenda. The purpose would be to create a set of essential global minimum measures or key 'Global Objectives and Absolute Living Standards' (GOALS) based on a 'Core Objectives, Directions, Ethics' (CODE) statement or primary set of 'Conduct Objectives Regulations and Ethics' (CORE). Financial markets are core components within any modern economy and society with market risk and exposures and other internal (endogenous) and external (exogenous) threats having to be built into any larger new systems examination and architecture.10 This also requires the adoption of a longer, and inter-generational11 or monumental approach,12 rather than short-term planning perspective to respond to emergent threats and continuing larger global problems. Financial markets and financial regulation have been developed to manage specific forms of identifiable risk as well as more peripheral exposures that may impact on market function and market stability.13 Financial institutions attempt to identify a full range of possible exposures, and to deal with these either directly through risk management systems and controls, including with capital, liquidity, and leverage constraints;or indirectly through the maintenance of appropriate continuity and support management systems.14 These include new Recovery and Resolution Programs (RRPs) and Special Resolution Regimes (SRRs).15 Financial regulation has traditionally been either micro, market and sector specific, or macro focused, which assesses the financial system as a whole.16 Other more subtle forms of exposure can be identified between these with new additional forms of prudential, or subprudential, regulation being developed.17 A number of recommendations can be made to construct new, more effective and efficient types of market regulation and control.