  Recently, large-scale cascading failures in complex systems have garnered
substantial attention. Such extreme events have been treated as an integral
part of the self-organized criticality (SOC). Recent empirical work has
suggested that some extreme events systematically deviate from the SOC
paradigm, requiring a different theoretical framework. We shed additional
theoretical light on this possibility by studying financial crisis. We build
our model of financial crisis on the well-known forest fire model in scale-free
networks. Our analysis shows a non-trivial scaling feature indicating
supercritical behavior, which is independent of system size. Extreme events in
the supercritical state result from bursting of a fat bubble, seeds of which
are sown by a protracted period of a benign financial environment with few
shocks. Our findings suggest that policymakers can control the magnitude of
financial meltdowns by keeping the economy operating within reasonable duration
of a benign environment.
