Nassim in some more focused presesntations before congress. Comments on Stimulus and free markets: Ht: Rocky Chen
My own opinion is that the best way to measure financial risk is to assume it is a function of concentration of opinion or belief. The more people, models, institutions etc. all believe the same thing to be true the greater the risk.
There is no "truth" in finance it is a social phenomenon, not a physical reality like physics, the laws of economics are plastic. Homogeneity in opinion leads to homogeneity in action and reaction.
It isn't the models, ratings agencies, regulators, traders or banks that cause financial catastrophes it is the fact that sometimes their opinions through mania, legislation or fate all converge leading to mania, panics and crashes.
Concentrations of opinion/belief are a form of collective myopia that is part of the human condition. We are social, we group, agree, act and propagate risk. The bubbles, actors and rationalizations change, but the ultimate causes of risk don't, we are all too human.
My own opinion is that the greatest current systemic risks outstanding are:
Basel II implementations leading to a "unified" framework for global banking risk.