Systemic risk: Difference between revisions
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imported>Doug Williamson (Add second definition.) |
imported>Doug Williamson (Mend link.) |
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* [[Macroprudential]] | * [[Macroprudential]] | ||
* [[ | *[[Systemically Important Payment System]] (SIPS) | ||
* [[Systematic risk]] | * [[Systematic risk]] | ||
* [[Systemic Risk Buffer]] | * [[Systemic Risk Buffer]] | ||
Revision as of 19:32, 26 June 2022
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.
