Systemic Risk


In finance, systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, group or component of a system. It can be defined as "financial system instability, potentially catastrophic, caused or exacerbated by idiosyncratic events or conditions in financial intermediaries". It refers to the risks imposed by interlinkages and interdependencies in a system or market, where the failure of a single entity or cluster of entities can cause a cascading failure, which could potentially bankrupt or bring down the entire system or market. It is also sometimes erroneously referred to as "systematic risk".

Read more about Systemic Risk:  Explanation, Measurement of Systemic Risk, Factors, Diversification, Regulation, Project Risks, Systemic Risk and Insurance, Discussion, Further Reading

Other articles related to "systemic risk, risk, systemic risks, risks, systemic":

Hedge Funds - Debates and Controversies - Systemic Risk
... Systemic risk refers to the risk of instability across the entire financial system, as opposed to within a single company ... Such risk may arise following a destabilizing event or events affecting a group of financial institutions linked through investment activity ... and the European Central Bank have charged that hedge funds pose systemic risks to the financial sector, and following the failure of hedge fund Long-Term ...
Subprime Crisis Background Information - Understanding The Risks Types Involved in The Subprime Crisis
... As a result of financialization and innovations in securitization, risks related to the inability of homeowners to meet mortgage payments have been distributed broadly, with a series of consequential ... There are five primary categories of risk involved Credit risk Traditionally, the risk of default (called credit risk) would be assumed by the bank originating the loan ... However, due to innovations in securitization, credit risk is frequently transferred to third-party investors ...
Subprime Mortgage Crisis Solutions Debate - Regulation - Systemic Risk Regulator - Arguments For A Systemic Risk Regulator
... supervision might have identified and blocked the extraordinarily reckless risk-taking at AIG-FP ... reduce the likelihood of future episodes of systemic risk like the one we faced at AIG." Economists Nouriel Roubini and Lasse Pederson recommended in January ... institution would pay an insurance premium to the government based on its systemic risk ...
Canadian Securities Regulation - Concerns With The Current Structure
... slow securities regulatory responses, which makes Canada vulnerable to market and reputational risks ... lessons from the recent capital markets crisis throughout 2008-2009 is that systemic risk is increasingly presenting itself in capital markets rather than being solely confined to ... The Panel reported that effectively addressing systemic risk requires the coordination and collaboration of all financial sector regulators in Canada ...
Systemic Risk - Further Reading
... "Uncontrolled Risk The Lessons of Lehman Brothers and How Systemic Risk Can Still Bring Down the World Financial System" ... Jobst, 2012, "Systemic Risk in the Insurance Sector-General Issues and a First Assessment of Large Commercial (Re-)Insurers in Bermuda," Working paper (March 14) ... Jobst, 2011, "Modelling Systemic Financial Sector and Sovereign Risk," Sveriges Riksbank Economic Review, No ...

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