Complex Systems with Patrick McKenzie (patio11) Talking to the Bank of England about systemic risk and systems engineering
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Oct 23, 2025 Patrick McKenzie dives into the critical vulnerabilities in financial systems, prompted by the CrowdStrike outage that crippled U.S. banks. He discusses the dangerous consequences of regulatory guidance that led to software monocultures. The conversation also touches on the booming stablecoin market, its potential risks for regulation, and the accountability issues in Silicon Valley. Lastly, McKenzie urges regulators to better understand AI risks, emphasizing the need for diverse engineering perspectives to mitigate systemic failures.
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Danger Of Single Points Of Failure
- Single points of failure (SPOFs) create disproportionate systemic risk in financial infrastructure.
- Scaling horizontally and avoiding unnoticed monocultures reduces blast radius from technical faults.
CrowdStrike Outage Grounded Tellers
- In July 2024, a CrowdStrike update caused blue screens across many US bank teller PCs and halted teller services for a day.
- That outage prevented large cash withdrawals and disrupted businesses relying on cash payrolls.
Use Five-Why Root Cause Framing
- Ask five ‘why’ questions after incidents to map root causes and systemic failures.
- This helps identify monocultures, testing gaps, rollback difficulties, and large blast radii.