Systemic Risk

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Systemic Risk

Risk common to a particular sector or country. Often refers to a risk resulting from a particular "system" that is in place, such as the regulator framework for monitoring of financial_institutions.

Systemic Risk

A risk that is carried by an entire class of assets and/or liabilities. Systemic risk may apply to a certain country or industry, or to the entire global economy. It is impossible to reduce systemic risk for the global economy (complete global shutdown is always theoretically possible), but one may mitigate other forms of systemic risk by buying different kinds of securities and/or by buying in different industries. For example, oil companies have the systemic risk that they will drill up all the oil in the world; an investor may mitigate this risk by investing in both oil companies and companies having nothing to do with oil. Systemic risk is also called systematic risk or undiversifiable risk.
References in periodicals archive ?
Within the capital increase, the Bank of France has increased its general risk fund by EUR2.
Thus, this has left a void in the literature regarding a general risk propensity scale that is applicable for business decision-making involving multiple facets of risk.
I decompose the risk (probability of loss) of a policyholder into a general risk and a specific risk.
We've shown that moderate drinking is a general risk factor for a lower IQ at age 4.
Section One describes general risks and precautions, such as food and water, animal contact, vector-borne diseases, fresh water exposure, and blood and body fluid contact.
However, the Board encourages individuals with MS to discuss the small general risks of any viral immunization with their physician.

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