An analytical framework to identify systemic risks must operate in both dimensions. Assessing systemic risks As I mentioned earlier, the international financial crisis has refocused policy attention on systemic risks and forced us all to think much harder – about what systemic risk means, how it can be measured and what implications does it have for policy.
There is a general consensus that systemic risk was underestimated across the board before this crisis and also that there is a pressing need to assess and evaluate such risks on an ongoing basis. Considerable efforts are ongoing, both internationally and amongst systemic regulators domestically, to develop a framework for assessing systemic risks and for potentially predicting systemic events.