Systemic Resilience, Integrity and “Too Big to Fail”
04 June 2013
Working out of PwC’s Washington, D.C. office, and having served both the public sector and private financial institutions, I’ve seen first hand the consequences of systemic failures in our financial system. I was involved in the TARP process — where the U.S. government had to step in to preserve the integrity of our financial system — and remain deeply immersed in both the policy and corporate worlds.
While this integrity can be put at risk due to honest mistakes, it can also, as we’ve learned, occur when individuals or institutions take huge risks knowing they will personally benefit if they pay off, but that society will step in and bear the brunt if they don’t — a phenomenon known as moral hazard.
In this persuasive and well-reasoned article, Professor Sandra Waddock offers another intriguing academic voice to our ongoing conversation about resilience and integrity. Drawing fascinating parallels to ecology, Sandy challenges common assumptions — including our economy’s single-minded focus on growth at all costs — and calls for greater systemic diversity as an essential ingredient to the long-term health and stability of our economic ecosystem.
Both the public and private sectors should welcome academic voices like Sandy’s. This “three-way partnership” is, I think, critical to the resilience upon which we all depend.
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