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 ?
Karachi -- State Bank of Pakistan (SBP) has launched monitoring of extensive borrowers in order to analyze repayment capacity and address systematic risks in case of default.
Asif Iqbal doha Despite the systematic risks posed, the country's insurance sector continues to report healthy growth as gross written premium (GWP) accelerated by 14.5 percent in 2017 compared to 11.8 percent in 2016, a report by Qatar Central Bank (QCB) said.
We are pleased to support Chubb, a recognized leader in the cyber insurance space, by providing them with additional insights into the systematic risks and other cyber-related exposures within their cyber portfolio.'
Week started on a bearish note as systematic risks overshadowed company specific positive news flows.
With these two principles in mind, and with similar objectives to the FSB at a global level, a macro-prudential supervisor was created in the EU, the European System Risk Board (ESRB), which, according to the regulations of its creation, (12) has the objective of preventing and alleviating the systematic risks which could compromise the financial stability of the European Union.
It will also improve financial market system, and do everything possible to prevent systematic risks and ensure a stable financial market.
If every financial firm and/or investor uses FinTech services based on the similar ML algorithm, would not it homogenize the financial system and increase systematic risks?
The bank risk would be higher if the few sectors which the bank exposes to have higher systematic risks, which can be explained by our regression results when risk-adjusted HHI is used as diversification measure.
"Under the premise of preventing systematic risks, allowing some default cases to happen naturally in compliance with market forces will...
This paper attempts to build a blueprint for the mitigation of future financial crises, by first identifying the key fundamental weaknesses in the banking system to include inadequate accountability and supervisory oversight as well as operating and systematic risks. Systematic risk is the risk that losses are not confined to a single institution, but can be transmitted or is capable of being transmitted to the financial system as a whole.
"We view the introduction of a number of measures in recent months to manage systematic risks in the banking and real estate sector as positive in supporting a sustained recovery," the report said.
Global systematically important banks are global financial institutions playing a critical role in the international financial market, whose material risk exposures or business failure would cause significant impact and even systematic risks to the global economy and financial systems.

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