Organizational Preparedness for Extreme Events in the Spanish Banking Sector: Integrating Risk Measurement, Management, and Organizational Mindfulness

This research examines organizational preparedness for extreme events in the financial sector as a multidimensional construct encompassing risk measurement, risk management, risk avoidance, and organizational mindfulness. Drawing on four established theoretical perspectives: Extreme Value Theory, Organizational Resilience Theory, Normal Accident Theory, and High Reliability Theory, this study examines how these modalities shape perceptions of the organizations’ preparedness for potential extreme events. Survey data from 315 professionals in risk-related roles in the Spanish financial sector were analyzed using Structural Equation Modeling. The results show that quantitative risk measurement and resilience tools for preparation, response, and recovery are positively associated with perceived preparedness for extreme events. Perceiving the financial system as complex and tightly coupled is negatively related to preparedness, although the relationship is only marginally significant. Organizational mindfulness was found to have a strong indirect effect on perceived preparedness by strengthening risk measurement and management, while mitigating perceptions of systemic vulnerabilities. This research highlights that preparedness for extreme events in the financial sector is shaped by analytical risk measurement, risk management practices, and an overall risk culture of attentiveness, with implications for strengthening organizational approaches to high-impact occurrences of both financial and non-financial nature.