Earlier this week the CERRE Tech, Media & Telecom practice published its latest report titled ‘Elements for Effective Systemic Risk Assessment under the DSA’ which focuses on how the understanding of systemic risk in financial services and banking can help advance the thinking in systemic risk assessments in digital services.
Authors Sally Broughton Micova and Andrea Calef found that the conceptualisation of systems as being made up of various core and peripheral players who are interconnected through direct and indirect relationships of varying weights or significance, and the categorisation of shocks (sources of risk) as idiosyncratic or systemic, depending on the number of players affected; and as endogenous or exogenous, depending on their origin, can be usefully applied in the context of the DSA. Likewise, the report found that, as is already the case in financial services, a benchmark of what constitutes systemic failure or systemic crisis is necessary for determining what constitutes a negative effect and what mitigation is appropriate.
The report will be presented in September in a public event that will gather representatives from the European institutions, regulators, and industry to discuss the findings and reflect on the latest developments in the implementation of systemic risk assessments over the summer.
The report is part of a bigger CERRE project that looks into systemic risk assessments under the DSA. Whereas this first phase aimed at translating the concepts associated with how systemic risk is used in financial services and banking, the following phase will focus on the operationalisation of systemic risk – its assessment and mitigation – as required by the DSA in order to explore what measures aimed at preventing harm mean in the context of online platforms and search engines at an operational level.
