The Implications of Complexity for Systemic Risk in the Superannuation System

18 Pages Posted: 26 Feb 2014

See all articles by M. Scott Donald

M. Scott Donald

UNSW Law

Bruce Robert Arnold

University of Technology Sydney (UTS) - Faculty of Business; UNSW Australia Business School, School of Banking and Finance; Australian Prudential Regulation Authority

Hazel Bateman

UNSW Sydney, CEPAR

Ross P. Buckley

University of New South Wales (UNSW) - Faculty of Law

Kevin Liu

School of Risk and Actuarial Studies, UNSW Business School | University of New South Wales, Australia

Date Written: February 24, 2014

Abstract

The funds, entities and regulators involved in the Australian superannuation industry together comprise a system that is complex and dynamic. The differentiation between roles and the distribution of responsibility offers the system as a whole resilience against local failure. However the interconnections that bind and constitute the system have the potential to create and transmit risks within the system. This undermines the system's resilience to exogenous shocks. This paper uses a new data set on 200 Australian superannuation funds to map and analyse those links as a first step towards assessing the nature and severity of the threat that the links pose to systemic resilience. It concludes by outlining some of the regulatory issues that arise.

Keywords: superannuation industry, pension funds, regulation, systemic risk

JEL Classification: G28, G32, G38

Suggested Citation

Donald, M. Scott and Arnold, Bruce Robert and Bateman, Hazel and Buckley, Ross P. and Liu, Kevin Yi, The Implications of Complexity for Systemic Risk in the Superannuation System (February 24, 2014). UNSW Australian School of Business Research Paper No. 2014ACTL02. Available at SSRN: https://ssrn.com/abstract=2400817 or http://dx.doi.org/10.2139/ssrn.2400817

M. Scott Donald (Contact Author)

UNSW Law ( email )

Kensington, New South Wales 2052
Australia

Bruce Robert Arnold

University of Technology Sydney (UTS) - Faculty of Business ( email )

Australia

UNSW Australia Business School, School of Banking and Finance ( email )

Sydney, NSW 2052
Australia

Australian Prudential Regulation Authority ( email )

400 George Street
Sydney, NSW 2000
Australia

Hazel Bateman

UNSW Sydney, CEPAR ( email )

High Street
Sydney, NSW 2052
Australia

Ross P. Buckley

University of New South Wales (UNSW) - Faculty of Law ( email )

Sydney, New South Wales 2052
Australia

Kevin Yi Liu

School of Risk and Actuarial Studies, UNSW Business School | University of New South Wales, Australia ( email )

Sydney, NSW 2052
Australia
+61 2 9385 7119 (Phone)

HOME PAGE: http://www.business.unsw.edu.au/our-people/kevinliu

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