an increase in systemic risk and the transfer of risk to them may, paradoxically, increase the exposure to systemic risk. Until recently, many theoretical models of finance pointed towards the stabilizing effects of a diversified (i.e., dense) financial system. Nevertheless, some recent work has started to challenge this view, investigating conditions under which diversification may have ambiguous effects on systemic risk. Within a certain range, financial interconnections serve as a shock-absorber (i.e., connectivity engenders robustness and risk-sharing prevails). But beyond the tipping point, interconnections might serve as a shock-amplifier (i.e., connectivity engenders fragility and risk-spreading prevails). Regulation One of the main reasons for regulation in the marketplace is to reduce systemic risk. However, regulation arbitrage – the transfer of commerce from a regulated sector to a less regulated or unregulated sector – brings markets a full circle and restores systemic risk. For example, the banking sector was brought under regulations in order to reduce systemic risks. Since the banks themselves could not give credit where the risk (and therefore returns) were high, it was primarily the insurance sector which took over such deals. Thus the systemic risk migrated from one sector to another and proves that regulation of only one industry cannot be the sole protection against systemic risks. Project risks In the fields of project management and cost engineering, systemic risks include those risks that are not unique to a particular project and are not readily manageable by a project team at a given point in time. They are caused by micro or internal factors i.e. uncertainty resulting from attributes of the project system/culture. Some use the term inherent risk. These systemic risks are called individual project risks e.g. in PMI PMBOK(R) Guide. These risks may be driven by the nature of a company's project system (e.g., funding projects before the scope is defined), capabilities, or culture. They may also be driven by the level of technology in a project or the complexity of a project's scope or execution strategy. One recent example of systemic risk is the collapse of Lehman Brothers in 2008, which sent shockwaves throughout the financial system and the economy. In contrast, those risks that are unique to a particular project are called overall project risks aka systematic risks in finance terminology. They are project-specific risks which are sometimes called contingent risks, or risk events. These systematic risks are caused by uncertainty in macro or