DefinePK

Abstract

This paper analyzes the current financial crisis 2008-09 theoreticallyand attempts to propose cybernetic framework based on viable systemmodel (VSM) principles to design more efficient financial system inglobal interdependent environment so as to avoid future financialsystem crisis. After a comprehensive literature review, Stafford Beer'sVSM approach has been applied to develop a five step design forproactive diagnosis of systemic risks and to ensure the confidence of allthe stakeholders in a highly sensitive and interdependent globalfinancial market. There is a considerable scope for further research onthis conceptual framework in creating viable financial system forprofessional finance experts and the business world in general tomoderate the financial echoes and ethos of all the stakeholders andregulating agencies for sound financial system. The sound financialsystem brings sustained prosperity through strong economies withexogenous impact on the budding economies. This paper observes theneed to oversee the full spectrum of current global financial crisis so asto offer a comprehensive VSM based framework to avoid futurefinancial system crisis.