Market structures change. These changes impact the risks that investors face, so the crisis of tomorrow may not be the same crisis of yesterday. If you are a good risk manager, you have to be an institutional economist. The institutional setting changes how risks channel through markets and you have to know the details. The new paper "This Time Is Different, but It Will End the Same Way: Unrecognized Secular Changes in the Bond Market Since the 2008 Crisis That May Precipitate the Next Crisis" by Daniel Zwirn, Jim Kyung-Soo Liew, and Ahmad Ajakh does a good job describing some of the key institutional or secular changes in bond markets over the last decade. We may not know which of these changes will be important during the next crisis, but we can say that the they will create surprises for investors and regulators who think they have solve the problems of the past.
The main thematic change is liquidity. Innovation through ETFs, changes in profitability for market makers, the mix of financial intermediaries, and the incentives to take risk will all affect liquidity. While following institutional changes is helpful, theory is unwavering. If the cost of liquidity increases, the price for immediacy will rise. Liquidity will not be present when you need it, so investors have to preemptively prepare for a crisis and potential pay the price of waiting for the next crisis to occur.
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