Systemic risk: Difference between revisions
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* [[Financial stability]] | * [[Financial stability]] | ||
* [[Gridlock]] | * [[Gridlock]] | ||
* [[SIPS]] | |||
* [[Systematic risk]] | * [[Systematic risk]] | ||
* [[Transfer system]] | * [[Transfer system]] | ||
Revision as of 18:42, 13 August 2016
The risk that the failure of one participant in a transfer system, or in financial markets generally, to meet its required obligations will cause other participants or financial institutions to be unable to meet their obligations (including settlement obligations in a transfer system) when due.
Such a failure may cause significant liquidity or credit problems and, as a result, might threaten the stability both of financial markets and of the wider economy.
These secondary adverse consequences are sometimes known as a 'domino effect' or 'contagion'.
