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risk thermometer

Madness in the method: Basel grapples with G-Sib riskometer

Some experts warn the methodology to identify systemic banks could increase systemic risks

It’s a simile perhaps more compelling than it is pleasant, but there is a sense in which the contemporary, model-based approach to macroprudential policy is rather like a rectal thermometer.

Jon Danielsson, director of the Systemic Risk Centre at the London School of Economics, speaks critically of a “riskometer”, the idea that systemic risk is a homogeneous quantity that models can represent

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