8Identifying emerging systemic risks in a complex system
Supervisors are like lifeguards at the community pool. The pool is crowded with swimmers. There is a lot of noise and shouting. Most bathers are regulars. The guard knows many of them by sight. But there are always newcomers. Some young, some old. Not all may be able to swim well or at all. Most of the time there are no instances of distress or imminent danger. But the guards cannot lift their gaze or start getting too familiar with the sunbathers at the edge of the pool, lest that be the very moment when disaster strikes, and lives are suddenly in peril. Such constant vigilance at the pool and by central bankers and supervisors is hard to achieve and sustain, yet it is what the public ...
