The National Transportation Safety Board: A Model for Systemic Risk Management

Journal of Investment Management (JOIM), First Quarter 2011

Posted: 9 Apr 2011

See all articles by Eric Fielding

Eric Fielding

National Transportation Safety Board

Andrew W. Lo

Massachusetts Institute of Technology (MIT) - Laboratory for Financial Engineering

Jian Helen Yang

MIT Sloan School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: April 6, 2011

Abstract

We propose the National Transportation Safety Board (NTSB) as a model organization for addressing systemic risk in industries and contexts other than transportation. When adopted by regulatory agencies and the transportation industry, the safety recommendations of the NTSB have been remarkably effective in reducing the number of fatalities in various modes of transportation since the NTSB's inception in 1967 as an independent agency. The NTSB has no regulatory authority and is solely focused on conducting forensic investigations of transportation accidents and proposing safety recommendations. With only 400 full-time employees, the NTSB has a much larger network of experts drawn from other government agencies and the private sector who are on call to assist in accident investigations on an as-needed basis. By allowing the participation in its investigations of all interested parties who can provide technical assistance to the investigations, the NTSB produces definitive analyses of even the most complex accidents and provides actionable measures for reducing the chances of future accidents. It is possible to create more efficient and effective systemic-risk management processes in many other industries, including financial services, by studying the organizational structure and functions of the NTSB.

Keywords: risk management, systemic risk, forensic finance, NTSB

JEL Classification: G00

Suggested Citation

Fielding, Eric and Lo, Andrew W. and Yang, Jian Helen, The National Transportation Safety Board: A Model for Systemic Risk Management (April 6, 2011). Journal of Investment Management (JOIM), First Quarter 2011, Available at SSRN: https://ssrn.com/abstract=1804613

Eric Fielding (Contact Author)

National Transportation Safety Board ( email )

490 L'Enfant Plaza East, SW
Washington, DC 20594
United States
202 314-6017 (Phone)

Andrew W. Lo

Massachusetts Institute of Technology (MIT) - Laboratory for Financial Engineering ( email )

100 Main Street
E62-618
Cambridge, MA 02142
United States
617-253-0920 (Phone)
781 891-9783 (Fax)

HOME PAGE: http://web.mit.edu/alo/www

Jian Helen Yang

MIT Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States
617 253-1000 (Phone)

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