systemic risk

What is systemic risk?

systemic risk definition and meaning on Finance terms:
The risk that the inability of one participant to meet its obligations in a system will cause other participants to be unable to meet their obligations when they become due, potentially with spillover effects (e. g. significant liquidity or credit problems) threatening the stability of or confidence in the financial system. That inability to meet obligations can be caused by operational or financial problems. <

 

reference: https://www.ecb.europa.eu/home/glossary/html/index.en.html

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