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Complexity and Crisis in the Financial System

Complexity and Crisis in the Financial System

Critical Perspectives on the Evolution of American and British Banking

Edited by Matthew Hollow, Folarin Akinbami and Ranald Michie

With contributions from across the disciplines of law, history, finance, and economics, Complexity and Crisis in the Financial System offers a truly interdisciplinary study of the relationship(s) between crises and complexity in the US and UK financial markets. Taken together, the contributions in this volume not only challenge many often taken-for-granted ideas about the nature of financial crises, but also broaden our understanding of the long-term causes (and consequences) of the global financial crisis of 2007–2008.

Introduction: rethinking the crises–complexity nexus

Matthew Hollow

Subjects: business and management, critical management studies, strategic management, economics and finance, economic psychology, financial economics and regulation


Crisis and complexity – since the turmoil of 2007–8, these two terms seem to have been twinned together by economists, financial commentators and academics on an increasingly frequent basis (Caballero and Simsek, 2009; Christophers, 2009). Indeed, so common has this conceptual coupling become that one is now almost surprised to find an article or opinion piece about the financial crisis of 2007–8 that does not mention the word ‘complexity’ at least once in its analysis of the events leading up to the crash. Of course, it is worth pointing out that the financial crisis of 2007–08 is far from the first financial crisis to be described in this way. Countless other crises – ranging from the Asian Crisis of the late 1990s to the 1929 Wall Street Crash – have also been (and continue to be) categorized as ‘complex’ events by many learned commentators (Kindleberger, 2000). Indeed, as far back as 1873, one can find commentators such as the influential British journalist Walter Bagehot using such terms to describe these periodic episodes of financial upheaval (Bagehot, 1910).