Readers' Guide Comment on “global risk management”
Clearly, something is wrong with global risk management. WEF has been trying for decades to forecast the Next Big Crisis. In recent years it has published an annual survey of major societal and economic risks. 1 Similarly, the OECD, the UN, the IMF, and the Financial Stability Forum and Board have all failed to identify major economic bubbles for the past several decades. Nevertheless, every bubble had its accurate forecaster. None of the relevant public or private institutions, however, were willing to act on the warnings.
An effective global risk management system needs a global institutional arrangement that has the power to act against all those institutions involved in creating a bubble, pretending there is no bubble, and/or hedging to ‘win’ on a bubble. It therefore needs more than a dialogue, no matter how high-level or how inclusive.
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