from Greenberg Center for Geoeconomic Studies

Stress Testing the System

Simulating the Global Consequences of the Next Financial Crisis

Book
Foreign policy analyses written by CFR fellows and published by the trade presses, academic presses, or the Council on Foreign Relations Press.

What if you took seventy-five of the most experienced professionals in the fields of finance, economics, foreign policy, and national security and confronted them with two dozen policy problems triggered by a massive contraction in the stock markets? That is the premise of Stress Testing the System: Simulating the Global Consequences of the Next Financial Crisis. Based on a policy simulation that was conducted before the September 11,2001 attacks and is now even more relevant, Council Fellow Roger Kubarych draws several key lessons: government policymakers need to dedicate time and resources to identifying the principal vulnerabilities of financial and political systems—and anticipating their possible consequences. While it won't help them predict a crisis, playing out a variety of low-probability, high-cost events will leave leaders better prepared when one occurs. Kubarych notes that policymakers' first priority in a financial crisis is to stabilize markets—all other problems are subordinate.

This book is more than a revealing account of the lessons and implications of time- and crisis-pressured decision making: it is an instructive guide to organizing business and financial "war-gaming." Kubarych provides an insider's look at the collaboration among great minds that led to a successfully crafted scenario played out with real-world accuracy.

More on:

Economic Crises

Homeland Security

United States

A Council on Foreign Relations Book

More on:

Economic Crises

Homeland Security

United States

Top Stories on CFR

Economics

The consequences of the COVID-19 pandemic and the rise of China have prompted renewed debate about the U.S. government’s role in shaping the economy.

United States

Progress on President Biden’s climate agenda will slow with a split Congress. But with federal efforts dulled, state-level action could supply added momentum.

International Organizations

The 2022 FIFA World Cup has kicked off in Qatar, and billions of fans worldwide are tuning in to the world’s most popular live event. And yet as in years past, the Qatar Cup is transpiring under the shadow of controversy.