Systemic Crisis Research Articles

Hedge funds, systemic risk and the market for mortgage-backed securities

Abstract In the early 2000s, the market for private-label residential mortgage-backed securities was built upon a pyramid of risk, and at the foundation of this pyramid were hedge funds. Few post-mortems recognise the critical role played by these institutional investors. This paper uncovers this essential piece of the puzzle and demonstrates that it is a natural outgrowth of the inherent operational freedom that defines hedge funds. It breaks these foundational risks down into two components—illiquidity risk and tail risk—and proposes solutions to prevent them from spilling over into systemic crises without eliminating the benefits that society reaps from this unique risk-taking. It concludes with important lessons for securitisation markets to consider during and after the COVID-19 recession.

Covid-19, the Anthropocene and Young People’s Well-Being: a Posthuman Rethinking of Young People as ‘Biocultural Creatures’

Abstract In two recent edited collections – Young People and Thinking Technologies in/for the Anthropocene and Young People and Stories for the Anthropocene (Kraftl et al., 2022; Kelly et al., 2022) we and our colleagues have argued for the need to develop new ways of ‘troubling’ orthodoxies in youth studies when the Anthropocene is producing multiple crises in earth systems. In this paper we do some of that troubling by drawing on a recent project in which we conducted interviews with young people in the context of the crises generated by the covid-19 pandemic, and tell a version of the story of Shakira and her struggles to ‘live well’ in the Anthropocene. In thinking about what we can make of her story, we will use Frost’s (2016) understanding of humans as ‘biocultural creatures’ who emerge in and from ‘biocultural habitats’, to develop an account of young people’s well-being that foregrounds the materiality and vitality of young people’s embodiment.

SWEDEN'S AND FINLAND'S ACCESSION TO NATO AS A FACTOR IN CHANGING THE EUROPEAN SECURITY SYSTEM

The article analyzes the prerequisites and consequences of the accession of Sweden and Finland to NATO. Neutrality is avoiding participation in wars and non-participation in military-political blocs in peacetime, as well as not providing national territory for foreign military bases, and refusing to sell weapons to opposing parties. The Russian ultimatum of November 2021 with the demands that NATO renounce the expansion of the alliance testified to the fact of a deep crisis of the European security system. The trend towards the formation of a multipolar system of international relations has changed the logic of the policy of neutrality. Defeat in the Northern War of 1700-1721 prompted Sweden to switch to a policy of active neutrality. In 1935, Finland declared its intention to pursue a neutral policy with priority given to the Scandinavian direction. After Finland's defeat in the Second World War, the so-called “Finlandization” became a feature of Finnish neutrality. “Finlandization” is considered as subordination of the political course of a weaker country to the interests of a more powerful neighboring country with formal preservation of sovereignty. The process of gradual formation of a multipolar world provoked a change in the geopolitical orientations of the states of Northern Europe. There is constant tension in the Arctic. The USA declared a course for a new Atlanticism aimed at continuing the process of expansion and structural and functional strengthening of NATO. The active phase of the Russian war against Ukraine, which began on February 24, 2022, was the decisive reason for the decision to join Sweden and Finland in NATO. The methodological support for the conclusions of the article is based on the theory of political realism and problematic and chronological analysis of the modern history of international relations. The scientific novelty of the article lies in determining the complex of geopolitical, military-strategic, historical preconditions and consequences of Sweden and Finland's accession to NATO.

Systemic crisis of modern international environmental law

The article examines the issue of a complex crisis situation in the field of international legal mediation of environmental protection activities, caused by the treacherous attack of the aggressor country on the territory of Ukraine, which showed the complete inability of the established model of international law, including its organizational and institutional component, to oppose the aggressor's plans due to the forced cessation of hostilities , which follows from the direct functional purpose of the United Nations as the main world peacemaker. First of all, a terminological excursion was made into the formation of the name of the field of international law, which provides legal protection of the environment, which is characterized by the absence of a unified conceptual and categorical apparatus, where, along with international environmental law, the names of international ecological, international nature protection and international environmental law are used. The author's conclusion is made about the expediency of finally stopping at the universal name of international environmental law. The conducted analysis made it possible to establish that the aggressor violated almost all existing branch principles of international environmental law, except for the principle of inadmissibility of radioactive contamination of the environment, which is also under constant threat of violation. The lack of an effective mechanism for the protection of the rights and interests of subjects of international environmental law is illustrated by the example of a number of international documents, in particular the Convention on the Prohibition of Military or Any Other Hostile Use of Means of Impact on the Natural Environment, the Convention on the Physical Protection of Nuclear Material and Nuclear Installations, the Convention on nuclear safety and the Agreement between Ukraine and the International Atomic Energy Agency on the application of safeguards in connection with the Treaty on the Non-Proliferation of Nuclear Weapons.

Dynamic scenario modelling of the role and influence of Brundtland and vulnerability upon sustainability in the UK in the Anthropocene

The Brundtland report and vulnerability are two of the fundamental perspectives of the environment-human system and relationship. However, the Brundtland report and its incarnations has been argued as anthropocentric in nature and fostering weak sustainability, thus resulting in vulnerability occurring. Furthermore, how the report and its incarnations has been interpreted and implemented by governments, businesses, and organisations is significant in determining sustainability outcomes. It is therefore appropriate and necessary to develop a fundamental dynamic understanding of how Brundtland and vulnerability over time may influence past and present-day sustainability outcomes at specified spatial scale. Consequently, building upon previous research, this paper develops a fundamental dynamic scenario model for the United Kingdom using the Sustainability Dynamics Framework. The model indicates that the UK has been significantly influenced by its interpretation and implementation of the Brundtland report, which has primarily focussed upon the economic and social development aspects. This has resulted in the present-day very weak to weak sustainability occurring for Brundtland-based factors, and weak unsustainability occurring for vulnerability factors. Based upon the historical and present-day modelled scenarios, the paper concludes that the UK is at a tipping point in respect to its environment-human system and relationship. A fundamental transformation is necessary to return the UK to optimum or below-optimum environment-human system thresholds and a more conducive co-evolutionary relationship. Unless this happens, then the risk of significant stress within the environment-human system will only continue to increase, with the possibility of a systemic crisis occurring, or possibly an environmental or societal collapse in the worst-case scenario.

Magic Mothers: How Parents of Children with Invasive Mechanical Ventilation Can Make Health System Crises Disappear

Magic Mothers: How Parents of Children with Invasive Mechanical Ventilation Can Make Health System Crises Disappear

Роман Маркеса «Сто лет одиночества»: опыт дискурсивного анализа

The object of the study is the novel “One Hundred Years of Solitude” by the Colombian writer Gabriel Garcia Marquez, which is considered one of the most complex works in world literature due to the many repetitive anthroponyms and bizarre expressive means due to the poetics of magical realism. A rationalized literary analysis is carried out, aimed at identifying and explaining the philosophical, anthropocentric message of the text, ‘cleared’ from mythopoetic layers. The main discursive, problem-thematic lines that predetermine the systemic crisis of society and the ‘end of the world’ are identified. These are ‘forgetfulness of native languages’, ‘military conflicts’, ‘desacralization of God’, ‘profanation of traditional values’, ‘environmental conflicts’, ‘dominance of urgy over gonia’, ‘incest’. The image ‘rainstorm’ and the anthroponym ‘Buendia’ are interpreted, symbolizing the probability of a ‘point of return’ and the historical optimism of the author. The conclusion is made about the high educational potential of the ‘novel-warning’.

Reconsidering expertise for public policymaking: The challenges of contestability

AbstractIt is commonly claimed there is a crisis of expertise in liberal democracies and that experts who provide evidence‐based policy ideas have become widely distrusted. This paper reconsiders the nature of this perceived crisis in policy advisory systems. The literature has identified four reasons for this trend—politicisation, diversification, diminished policy capacity, and populism. Building on these claims, this paper suggests that the contestability of policy advice has been the key underlying shift in policy advisory processes. Contestability can be positively useful for testing the robustness of policy proposals. However, if the policy debate has no evidentiary standards, the contest becomes a clash of opinions and slogans. Hence, several approaches have been proposed to strengthen the role of professional expertise and improve the quality and legitimacy of evidence‐informed policymaking. One approach is the rebuilding of bureaucratic capacity to provide evidence‐informed policy advice. However, a technocratic–elitist style that invokes scientific authority would be difficult to sustain politically in relation to complex issues affecting citizen well‐being. A second approach is to improve stakeholder engagement and to enhance respect for the expertise embodied in ‘lived experience’. Thus, rebuilding trust and legitimacy may require broadening the range of relevant expertise through multi‐stakeholder approaches.Points for practitioners Types of expert policy advice have evolved and diversified, with many sources and channels both inside and outside government Contestability of policy advice has become more widespread Public service policy capacity has arguably been weakened through outsourcing, use of consultants, interest group lobbying, and the growing influence of ministerial advisors Evidence‐informed advisory systems have been challenged by fast decision‐making, wicked problems, media misinformation, and populist slogans Rebuilding capacity and trust in high‐quality policy systems requires new thinking, including more inclusive processes and a wider view of relevant expertise.

Swiss cohort of healthcare professionals & informal caregivers (SCOHPICA): baseline survey's results

Abstract Background Worldwide, health systems face workforce problems such as personnel shortages, low job satisfaction and burnout. In Switzerland, data is insufficient to address this health system crisis. Hence, the Swiss COhort of Healthcare Professionals and Informal Caregivers (SCOHPICA) aims to study healthcare professionals (HCPs) and informal caregivers’ experiences, well-being, and career/personal trajectories. Results of the baseline survey on HCPs (completed in January 2023) are reported. Methods SCOHPICA is an open prospective cohort. Any HCP working with patients in any healthcare setting in Switzerland was eligible. The data was collected with a self-reported electronic questionnaire. Outcome variables are intents to stay in the job/profession/health sector and well-being; we also explored organizational, psychosocial, psychological and occupational factors, as well as sociodemographic and socioprofessional variables. Results The baseline sample included 1707 HCPs, with 32% registered nurses, 12% physicians and 9% physiotherapists among others. In the next few months, 20% of HCPs “not really/not at all intended to stay in their job”, 13% “in their profession” and 11% “in the health sector”; “not intending to stay in the profession” was highest among healthcare assistants (HCAs), nurses and pharmacists. Well-being was also low for these HCPs. Across other factors, pharmacists, physicians, and nurses showed worse scores than other HCPs, especially for workload and work-life balance. HCAs, pharmacists, and nurses reported more burnout and worse self-rated health. Conclusions Results revealed that some categories of HCPs had a lower intent to stay in their profession, and worse working conditions and experiences, such as nurses and pharmacists, compared to other HCPs. Future data collections, findings and data dissemination through a data repository will support decision-makers and public health policies with first-hand evidence. Key messages • SCOHPICA is the first cohort study to examine the working conditions, intents to leave/stay in the profession, well-being and trajectories of all types of healthcare professional across Switzerland. • At baseline, 13% of healthcare professionals did not intend to stay in their profession; pharmacists and nurses reported worse working conditions and experiences than other healthcare professionals.

Power and politics of health system data: how data shape responses and equity during pandemics

Abstract Background Pandemics disproportionately affect vulnerable groups. There are documented socioeconomic, gendered, and racialized differences in the burden of disease during COVID-19 and previous pandemics due to factors such as lack of access to social safety nets, poor quality of housing, and precarious working conditions. Therefore, equity should be a key principle for health system preparedness. However, the monitoring and detection of inequities largely depend on the availability of disaggregated data. Often, such data are not available nor are they utilized to promote equity-based approaches during major public health crises. Methods The article builds on social epidemiology and is conducted as a theoretical review. It uses health monitoring data collected in the Finnish health system and the Finnish response to COVID-19 as case studies to investigate how data shape equity and responses during rapidly unfolding crises. Finland provides an interesting context for the case studies due to its extensive and high-quality health registers and health monitoring data. Results In the article, we present a summary of the Finnish health system monitoring data infrastructure and a review of factors affecting data collection and utilization processes in Finland. We then describe how register data was utilized as a part of the Finnish response to COVID-19. Finally, we present an example of how the utilization of disaggregated vaccination coverage data helped create an equity-based community health promotion response during COVID-19 in Finland. Conclusions The article points out several understudied populations in the Finnish health system monitoring infrastructure, including those with lower incomes, undocumented immigrants, racialized minorities, and LGBT populations. While waiting for national health monitoring systems to “catch up”, smaller-scale community-based responses can be used to tackle inequities during health system crises. Key messages • Critical research approaches to health system data and data gaps are crucial since these data are the product of decisions, prioritization and value judgments made by health system actors themselves. • Revision work of pandemic preparedness plans across Europe needs to acknowledge how health system monitoring shape both responses and equity during crises.

Do Changes in Risk Perception Predict Systemic Banking Crises?

This paper examines if incorporating changes in financial market risk perception improves the predictive power of an early-warning system for systemic banking crises. In explaining systemic banking crises, the existing literature identifies inflating stock and real estate bubbles, credit booms, and surges in net capital inflows as the common drivers. Employing panel logit models to predict the postwar systemic banking crises in advanced economies to occur within three–four years, the paper’s key finding is that, even after controlling for the effects of surges in asset and credit markets and net capital inflows that are above the long-run trends for an extended period, market participants’ increasing underestimation of downside risks is a significant predictor of these crises. Incorporating changes in risk perception improves the prediction accuracy of the model significantly. This finding is robust across alternative prediction horizons, systemic crisis definitions, and risk-perception measures. Consistent with the recent theoretical developments in the form of the diagnostic expectations hypothesis for financial markets, the interpretation is that recent recurring good news about financial markets and the broader economic trends for sufficiently long periods lead to growing neglect of tail risks and riskier financial transactions, raising systemic risk and the likelihood of a financial crisis. The finding suggests monitoring financial market risk perception, in addition to the conventional indicators, to predict and avert systemic banking crises.

Racist norms until interests converge: a long tradition of egregious educational policy patterns and global implications

ABSTRACT This article contextualises the crisis in Black education and the death of a 100-year-old Black educational system resulting from an unintended consequence of Brown: the excavation of thousands of highly educated and skilled Black educators. This theoretical article advances the literature on Brown using two critical race theory (CRT) tenets, the permanence of racism and interest convergence, to discursively trace the regression of Black education. This article illustrates the myriad ways interest convergence and the permanence of racism contribute to crises in Black educational systems and the death of a 100-year-old Black educational system. A limitation of CRT in education is the homogenous treatment of Black people despite their variations and conditions. Additionally, analysing connections between Brown, ESEA, and NCLB needs further examination. Finally, I advance that Black resistance to the permanence of racism in the US had global interest convergence implications and aligned with decolonial and independence movements.

Problematic issues in the theory of research of regional development institutions

Subject. This article examines the economic relations arising from the creation and activities of regional development institutions. Objectives. The article aims to identify the reasons for the low efficiency of regional development institutions in Russia. Methods. For the study, we used the general scientific research methods. Results. The article finds that the inefficiency of the functioning of regional development institutions in Russia is largely due to the ill-conceived transfer of the rules in force in the developed countries of the West to the socio-economic space of Russia, which is influenced by geographical, historical and other factors. Conclusions. The causes of the crisis of the Russian system of regional governance cannot be narrowed down to institutional traps only. Adaptation of regional development institutions to Russian conditions is possible on the basis of the concept of meso-institutions as structures whose task is to implement reform projects developed at the level of governments and international organizations, taking into account local specifics.

К общей теории кризиса империи

The author claims that the roots of the revolution lie deeper than allowed by the mentality of the Enlightenment. It should be considered in the paradigm of historical cyclicity, which produced especially large-scale and painfully affects to complexly organized imperial systems. As applied in Russia in the 17th – 20th centuries, the systemic crisis, with varying degrees of intensity, went through the following stages or levels: ethical, ideological, political, organizational, social, ochlocratic, recreational. It was a synergistic process, the chaotic course of which, in the final analysis, turns out to be dependent not on ideology and politics, but on the psychology of the masses. Its result was due to the fact that the masses, having exhausted all the possibilities of getting out of a critical situation, turned to historical experience, that they see. In Russia, it is associated mainly with the paternalistic type of worldview.

Подолання суспільного страху як один із чинників боротьби за незалежність України

The article defines the concepts of „public fear” and „Russian Bolshevism”. After the Russian Bolsheviks seized power in Ukraine, the Ukrainian SSR was proclaimed with the aim of subduing the public space of Ukraine and penetrating the territories of neighbouring countries where Ukrainians lived, for subversive purposes. A criminal body, the All-Ukrainian Extraordinary Commission, was established to subdue the Ukrainian population and take over its economy. The main methods used in the struggle against the Ukrainian population were the introduction of the institution of ‘hostage-taking’; the institution of denunciation; extrajudicial executions; evictions from Ukrainian territory; the fragmentation of the population on social and national grounds; the physical destruction of opponents and those who resisted the regime; the use of a genocidal system of punishment such as the Holodomor against the Ukrainian peasantry, resulting in the deaths of millions of people. The systemic crisis in the USSR, access to education, the resistance of the Ukrainian intelligentsia to Russification and the fragmentation of society and access to information were the main factors in overcoming social fear. The combined efforts of internal opposition to the Soviet regime and Ukrainian political emigration led to the collapse of the USSR and the restoration of Ukrainian independence.

Unlocking the interaction of social restriction and social protection in Indonesia’s COVID-19 policy: future risk and adaptation

ABSTRACT The Indonesian government has issued hundreds of regulations and policies to deal with the impact of the COVID-19 pandemic. These various policies and regulations assess how a government responds, mitigates, and prevents systemic crises in its country. These decisions- and policy-making processes are largely determined by the country’s unique socioeconomic and political landscape. This paper reviewed 875 regulations issued by the Indonesian government at the national level in 2020–2022 to determine which policies have the most direct social, economic, and health impact on the Indonesian population. We highlight social protection to explore the challenges and opportunities to respond future risk by taking benefit from progressive effort of the Indonesian government to protect all Indonesian populations with the priority of the most vulnerable groups. This paper aims to map out government policies and regulations in handling the pandemic and exploring the potential opportunities for adaptation to respond future risk. The study is based on expert group discussion and policy mapping. As one of the findings of the investigation, this paper discusses the interaction between large-scale and micro-scale social restriction and social protection policies, which are considered the foremost solutions for handling Indonesia’s more severe economic crisis and facing current and future risks, including climate change impact. While social protection is one of the massive strategies to relieve economic impact to the most affected group, effectiveness and success are still challenges concerning data. This paper also provides important notes regarding climate change adaptation and how the government must respond to future risks.

A systemic crisis: political consequences of the 1989 Tiananmen square events

The article attempts to revise the understanding of the nature of China’s 1989 Tiananmen Square crisis and its consequences in the context of comparison with Soviet/Russian history of 1980-1990s. Several dozens of studies and op-ed pieces focused on the problem earlier (especially in Russian-language literature) but these papers lacked Chinese sources, intended to liken the Tiananmen Square crisis to the Russian agenda, and simplified complicated cause-effects relations of the Chinese historical process. As a result, the conclusions are limited to the question of the necessity of a decisive crackdown on any turmoil or political manifestation as a sole tool to protect one nation’s stability and prosperity. China’s stability and prosperity after the Tiananmen Square Crisis should not be seen as a result of crackdowns. Paradoxically, despite the conservatives’ victory in 1989, China got back to the path of reforms several years after the Tiananmen Square events. It can be attributed to the complex set of internal and external factors, and the freezing of China’s political reforms was just one of them. Moreover, the process was facilitated not only by overcoming its political crisis but also by observing the revolutions of 1989 in Eastern Europe. Faced with the threat of being ousted from power, China’s elites consolidated – a factor that became crucial for the implementation of systemic market reforms in the 1990s. The author concludes that a similar situation was observed in post-Soviet Russia in 1998-2000: the Russian financial crisis and several events including Second Chechnya Campaign became the ‘backbone crisis’ of Vladimir Putin’s presidency.

Factors influencing enterprise organizational resilience: Evidence based on machine learning

AbstractThis paper synthesizes the differences in the predictive power of multidimensional firm characteristics on organizational resilience and further identifies the key characteristics and their specific impact patterns. It is found that the firm's stability during the crisis depends more on the pre‐crisis firm's operating conditions, while the post‐crisis firm's flexibility depends more on the firm's internal and external resources. Besides, some firm characteristics rank higher in predicting the importance of organizational resilience. This study examines organizational resilience characteristics from a more comprehensive perspective and provides empirical evidence on how managers can better respond to systemic crises and enhance organizational resilience.

ANTI-CRISIS MANAGEMENT OF BANK ACTIVITIES UNDER CONDITIONS OF INTERNAL THREATS

The development of banking meets crisis situations which due to social role and the specificity of functions requires a specific method of management as well as measures to prevent crises. The need to develop anti-crisis management occurs at the time of planning banking activities and relates to the specifics of the banking sector.
 In modern relations the unstable and changing economic situation is prone to constant changes, and as a rule, the inability to quickly adapt to these conditions creates a crisis situation in a bank which turns into a crisis state and becomes a risk for bank existence and requires the immediate implementation of measures for financial recovery .
 The article considers the concepts of crisis, banking crisis, anti-crisis banking management, provides a primary assessment of anti-crisis measures that are used in domestic banking practice in emergency situations, suggests directions for further work in anti-crisis management to prevent the consequences of a banking crisis at the current stage. It has been found that the banking crisis can be studied as a crisis of a separate banking institution or as a crisis of the entire banking system. The causes of crises have been clarified, the classification of which has been supplemented by a separate group of factors of emergency situations, since they require a more detailed study and the development of appropriate anti-crisis measures to overcome their consequences. It has been determined that anti-crisis management is carried out at different stages and with different goals: in normal conditions of bank functioning - with the aim of preventing a crisis, in crisis conditions - with the aim of overcoming its negative consequences.

The Mechanism of Optimal Development of the Regional Spatial and Sectoral Structure in the Conditions of Transition to the Digital Economy

In article approaches to justification of the mechanism of optimum development of regional spatial-industry structure in the conditions of transition to digital economy are generalized theoretical-methodological. In the conditions of the next multidimensional crisis of a world economic system caused by competitive wars and local wars with use of lethal weapon the frailty of the existing economic theories at their checking is shown by order and chaos. It indicates the need of application of the basic theory for economy for which the existing economic theories are the first and second derivatives with the specific set of the principles of development. As such basic theory the chaotic theory of inflation of economic space (CTIES) as an analog of the chaotic theory of inflation of the Universe which is the basic theory in a modern general scientific picture of the world can serve in economy. The author offers based on CTIES use of the principles of sustainable development as the transitional stage to a noonomy, at the same time needs the solution of problems of balancing of developments on the chosen parameters by means of application of a triad of matrixes paradigmatic, management and matrixes of technological effectiveness within trinities «society – ​economy – ​ecology», «organization – ​motivation – ​informatization» and «labor instrument – ​objects of the labor – ​work» respectively. The most acceptable methodology for this purpose is the methodology based on the geometrical theory of optimal management. Such approach assumes work with Big Data, Data Science, Data mining, Machine learning, etc. characterizing transition to digital economy and, respectively, to researches on the basis of the Fourth paradigm of science (Science 4.0, E-science).