Systemic risk: Difference between revisions
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imported>Doug Williamson (Link with Conduct risk page.) |
imported>Doug Williamson (Add second definition.) |
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1. ''Market supervision and regulation.'' | |||
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. | 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. | ||
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These secondary adverse consequences are sometimes known as a 'domino effect' or 'contagion'. | These secondary adverse consequences are sometimes known as a 'domino effect' or 'contagion'. | ||
2. | |||
By extension, and more loosely, all risks accepted by participating in a given market, including the risk of contagion. | |||
== See also == | == See also == | ||
* [[Contagion]] | |||
* [[Conduct risk]] | * [[Conduct risk]] | ||
* [[European Systemic Risk Board]] | * [[European Systemic Risk Board]] | ||
Revision as of 11:51, 18 April 2020
1. Market supervision and regulation.
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'.
2.
By extension, and more loosely, all risks accepted by participating in a given market, including the risk of contagion.
