Sudden Financial Arrest
48 Pages Posted: 15 Nov 2009
Date Written: November 8, 2009
There are striking and terrifying similarities between the sudden failure of a heart and that of a financial system. In the medical literature, the former is referred to as a sudden cardiac arrest (SCA). By analogy, I refer to its financial counterpart as a sudden financial arrest (SFA). In this article I describe SFA and its treatment guided by its medical counterpart.
Keywords: Financial crisis, panic, defibrillation, complexity, Knightian uncertainty, moral hazard, financial network, capital requirements, contingent capital, contingent insurance, IMF
JEL Classification: E32, E44, E58, F30, G01, G20
Suggested Citation: Suggested Citation