Systemic Risk can often be identified: In January 2003, in a letter published in the Financial Times I wrote: “Everyone knows that, sooner or later, the ratings issued by the credit agencies are just a new breed of systemic errors, about to be propagated at modern speeds. Friends, as it is, the world is tough enough.”

That indicates the systemic risk of having many have to follow the opinions of some very few… rating agencies, regulators, experts and so on.

But regulators with their risk weighted capital requirements also ignored that credit risks were already cleared for by bank with their interest rates and size of exposures. And, any risk, even in perfectly perceived, causes the wrong actions if excessively considered.

And that, the under-consideration or the over-consideration of risks, is another fundamental source of systemic risks.

http://subprimeregulations.blogspot.com/2014/12/the-per-kurowski-rule-s…