What I want to focus on today is a risk that we have not called 'risk' until now.
Traditional economics measures risk through prices, debt ratios, and liquidity indicators. However, as Piketty revealed in Capital in the 21st Century, the structure in which [[return on capital]](r) consistently exceeds the economic growth rate (g) — r > g — goes beyond simply deepening [[inequality]] and reorganizes the decision-making structure of society as a whole. The more capital is concentrated in the hands of a few, the more the actors holding that capital dominate the network of corporate boards, financial institutions, and regulators.
This is the starting point of [[Relational Risk]] (Relational Risk).
Stiglitz's [[information asymmetry]] theory provides a crucial clue here. Information flows through networks. When a network is reorganized around a few power centers, the flow of information also becomes concentrated in specific nodes. These are classic conditions for market failure. However, we have empirical evidence that this structure is already generating crisis signals at the individual company level. In 85.9% of domestic trading suspension companies, signals of [[executive network]] dissolution were detected before the occurrence of a financial crisis. While the balance sheet still looked healthy, the network of relationships was already beginning to collapse.
Why now? The net asset share of Korea's top 10% will exceed approximately 65% by 2023, significantly exceeding the OECD average. In research on corporate governance, we consistently observe a tendency for the concurrent executive networks of large domestic corporations to converge on a very small number of hub nodes. In this structure, crises do not come 'without warning'. It was already predicted in the network. We just don't have the language to read it.
Relational risk theory suggests just that language. This is not a replacement for the existing financial risk management framework, but rather an economic formulation of structural leading indicators that it does not capture. If we acknowledge that inequality is not simply a distributional problem but a source of systemic risk, relational risk should no longer remain an academic hypothesis.
supporting data
- Piketty, T. (2014). Capital in the Twenty-First Century. Harvard University Press.
- Stiglitz, J. E. (2002). Information and the Change in the Paradigm in Economics. American Economic Review, 92(3).
- Stiglitz, J. E. (2012). The Price of Inequality. W. W. Norton.
- Watts, D. J., & Strogatz, S. H. (1998). Collective dynamics of ‘small-world’ networks. Nature, 393, 440–442.
- Burt, R. S. (2004). Structural Holes and Good Ideas. American Journal of Sociology, 110(2), 349–399.
- Bank of Korea (2023). Household Financial Welfare Survey. Domestic top 10% net worth market share exceeds 65%.
- Fair Trade Commission (2023). Status of governance structure of large conglomerates. Executive concurrent network intensive data.
- RaymondsRisk's own empirical study (2026): 85.9% of 276 KOSPI/KOSDAQ trading suspension companies captured in advance.
#relationalrisk #raymondsrisk #raymondsindex #konnectai
Comments
Post a Comment