Systemic risk in the financial system

A central feature of financial markets is that they are prone to “manias, panics and crashes”, to take the title of the seminal book by Robert Aliber and Charles Kindleberger. Corralling them through regulation is thus necessary to limit the damage from excessive volatility. Ten years after the financial crisis of 2008, and faced with the disruptions brought by the COVID pandemic, are we about to face another wave of financial crises? Furthermore, how should we react to the pandemic while keeping in mind the financial consequences of long-term challenges such as climate change?