The Inevitability of Instability

I was really happy to recently read an article (in the link above) on the inevitable nature of events like the financial crises in the Economist. This is because, it is my opinion that this way of thinking lays the foundation for better management of these in future. When actors in the industry begin to acknowledge that there is a limit to what they foresee and predict, they begin to put in place better institutions and mechanisms to mitigate these unforeseeable events. The fact however still remains that stakeholders still focus to a large extent on using regulation as a mechanism for addressing these and this was evident in the article with various commentators suggesting a safety net approach, insurance etc. We should remember that regulation is just one form of governance mechanism; and in the case of the financial crises where individual responsibility is crucial, there is a need to combine regulation with other forms of multi-level governance mechanisms within organizations in a way that encourages responsible behaviour in a voluntary way.

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