David Kotok tackles systemic risk:
Lehman was arguably the financial shock of our generation. Here are some others that had financial implications. The last generation encountered a shock with the outbreak of the Middle East War in 1973, when the price of oil quadrupled and interest rates subsequently reached the highest levels they had seen since the Civil War. The generation previous to that one received its shock with the Japanese bombing of Pearl Harbor in 1941. And the preceding generation experienced its shock in December, 1930 when the Bank of the United States failed and 500,000 businesses lost their bank deposits. As we can see, financial systemic shocks are mostly but not always the result of the failure of a financial firm.
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