Financial risks don’t go on holiday

Better mapping of financial system would help avoid seasonal surprises, argues Andrew Lo

August is typically when Wall Street goes to the beach, the mountains, or just home to recharge for a week or two. Many Europeans take the entire month off. But financial markets have a cruel knack of ruining holidays. As we lie in our hammocks this August, we might do well to recall a remarkable event that occurred, seemingly without warning, 11 years ago this month in the run-up to the financial crisis.

Perhaps our stress would be lessened if we knew our colleagues manning the fort back in th