Introduction

Abstract

This chapter describes the structure and primary focus of the book. The invention of money, several thousand years ago, ranks as one of humanity’s more important inventions. The extent to which a society adopts modern financial practices (such as those underpinning modern capital markets, banking and insurance) strongly links to its overall competitiveness. Money makes practical the effective division and specialisation of labour and of other factors of economic production. It allows us to borrow or save depending on whether our current productive activities are less than or greater than our immediate consumption needs. Systemic risk (in a financial context) is about the ways in which this backdrop can get disrupted (and what we can do to mitigate this risk). Who amongst us, in their heart of hearts, would be happy to return to stone-age barter?