The National Transportation Safety Board: A Model for Systemic Risk Management

48 Pages Posted: 24 Oct 2010 Last revised: 16 Nov 2010

Eric Fielding

National Transportation Safety Board

Andrew W. Lo

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER); Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL)

Jian Helen Yang

MIT Sloan School of Management

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Date Written: November 14, 2010

Abstract

We propose the National Transportation Safety Board (NTSB) as a model organization for addressing systemic risk in industries and contexts other than transportation. When adopted by regulatory agencies and the transportation industry, the safety recommendations of the NTSB have been remarkably effective in reducing the number of fatalities in various modes of transportation since the NTSB’s inception in 1967 as an independent agency. Formerly part of the Civil Aeronautics Board (now the Federal Aviation Administration), the NTSB has no regulatory authority and is solely focused on conducting forensic investigations of transportation accidents and proposing safety recommendations. With only 400 full-time employees, the NTSB has a much larger network of experts drawn from other government agencies and the private sector who are on call to assist in accident investigations on an as-needed basis. By allowing and encouraging the participation of all interested parties in its investigations, the NTSB is able to produce definitive analyses of even the most complex accidents and provide genuinely actionable measures for reducing the chances of future accidents. We believe it is possible to create more efficient and effective systemic-risk management processes in many other industries, including the financial services industry, by studying the organizational structure and functions of the NTSB.

Keywords: Systemic Risk, Risk Management, Financial Regulation, Office of Financial Research, NTSB

JEL Classification: G18, G28, G38, K22, L50

Suggested Citation

Fielding, Eric and Lo, Andrew W. and Yang, Jian Helen, The National Transportation Safety Board: A Model for Systemic Risk Management (November 14, 2010). Available at SSRN: https://ssrn.com/abstract=1695781 or http://dx.doi.org/10.2139/ssrn.1695781

Eric Fielding

National Transportation Safety Board ( email )

490 L'Enfant Plaza East, SW
Washington, DC 20594
United States
202 314-6017 (Phone)

Andrew W. Lo (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-618
Cambridge, MA 02142
United States
617-253-0920 (Phone)
781 891-9783 (Fax)

HOME PAGE: http://web.mit.edu/alo/www

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL)

Stata Center
Cambridge, MA 02142
United States

Jian Helen Yang

MIT Sloan School of Management ( email )

77 Massachusetts Ave.
E62-416
Cambridge, MA 02142
United States
617 253-1000 (Phone)

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