European Master and Certification Program
in Risk Engineering and Management

XIII-E-R54:
Managing Risks in Complex System

Course code: 181367
Language of instruction: English
Lecturers: Dr. Peter Klimek (European Virtual Institute for Integrated Risk Management), Prof. Dr. Aleksandar S. Jovanovic (Steinbeis Advanced Risk Technologies GmbH), Ph.D. Reto Schneider (SWICA Gesundheitsorganisation)
Assessment: Defined in the module

Short description

As the recent financial crisis that started in 2008 has shown, we do neither understand nor know how to deal with systemic risk, that is the risk that an entire system will break down or cease functioning due to initially relatively minor defects. The course introduces a quantitative framework to understand under which circumstances the increasing complexity and interconnections of socio-economic and environmental systems leave them more vulnerable to small risks that may trigger a possibly complex chain of events leading to consequences at much higher levels of organization. We will learn how to quantify the systemic risk in different types of complex system and how it can be managed in a data-driven way. This will be shown on various real-word examples, including financial markets, commodity trade, and health care.

 

Objectives

At the end of the course the students are expected to have basic knowledge about:
• which types of risk emerge in complex systems due to the presence of strong interconnections and interdependencies, so-called “systemic risk”.
• how systemic risk can be quantified and monitored by using big data analytics
• several case studies that illustrate risk management processes in complex systems, including financial markets, commodity trade, and health care processes.

Target Attendees / Participants

The course is dedicated to university students of Steinbeis European Master Program in Risk Engineering and Management, and similar programs.

Course Content by Units

1.

Introduction to systemic risk and its management

· What is systemic risk?

· Why is systemic risk different from other types of risk, such as credit risk?

1/8

2.

Quantifying risks in complex systems

· Quantitative indicators and network-based measures for risks in complex systems.

· Going beyond traditional networks: quantitative indicators for interdependencies in generalized data structures, such as multipartite and multi-relational networks.

2/8

3.

Managing risks in complex systems

· How to leverage data analytics and visualization techniques for the management of risks in complex systems

· From indicators to models: how to build models for risks in complex and adaptive system and their use to manage such risks.

2/8

4.

Applications

· Examples for the management of risks in complex systems:

· Finance: How to identify systemically risky financial institutions.

· Trade: How to assess the criticality of resources in supply chains

· Health care: Chronic diseases, multimorbidity, and polypharmacy

3/8

5.

Review of main course issues and preparation for the final exam

180


Teaching Methods

The course
• is illustrated by number of examples,
• presents commonly used methods and tools, and
• provides exercises and preparation for the final exam.

Literature

• A.G. Haldane, R.M. May, Nature 469, 351-5 (2011).
• S. Battiston, M. Puliga, R. Kaushik, P. Tasca, G. Caldarelli, Sci. Rep. 2, 541 (2012).
• S. Thurner, S. Poledna, Sci. Rep. 3, 1888 (2013).
• and the references within the above scientific papers.


For more information about the European Master and Certification Program in Risk Engineering and Management in general, go the Homepage.
For more information about the European Master Program in Risk Engineering and Management in general, go the Master Study page.
To see more courses in the curriculum, go to The curriculum page, or by date and topic go to the Calendar of Courses page.
Contact: via email sti889@risk-technologies.com or phone +49 711 1839 781 or +49 711 1839 647
(Course profile ID: XIII-E-R54:, generated on November 19, 2018)