systemic risk

noun

: the risk that the failure of one financial institution (such as a bank) could cause other interconnected institutions to fail and harm the economy as a whole

Examples of systemic risk in a Sentence

Recent Examples on the Web At some point soon, the best proprietary models will cross into this systemic risk category. Jeremy Kahn, Fortune, 6 Feb. 2024 Those that pose a systemic risk will need to sign onto a voluntary code of conduct to work with the commission to mitigate risks. Jillian Deutsch, Fortune, 9 Dec. 2023 The report also criticized the Fed for underestimating the systemic risk posed by the collapse of Silicon Valley Bank, suggesting that regulators overlooked the panic that could result from a bank concentrated in a slice of the tech industry. Max Zahn, ABC News, 28 Apr. 2023 Plus, alternatives do nothing for the systemic risk of the indexes or traditional money managers used in the core of the portfolio. David Thomas, Forbes, 19 Apr. 2023 On the contrary, more banks applying the same weak banking practices would have only amplified the systemic risk. Mark T. Williams, Fortune, 21 June 2023 Unlike last cycle, the consumer has to qualify for the higher rates so poses less of a systemic risk to the wider economy. Lance Lambert, Fortune, 22 June 2023 A day later, Yellen said in something of a reversal that the federal government is ready to take more action to stop bank contagion if necessary to curb systemic risk. Krystal Hur, CNN, 26 Mar. 2023 While the financial system remains under stress, experts said, the current unrest is unlikely to pose a systemic risk, since the damage is contained within a relatively narrow group of banks vulnerable to high interest rates and depositor panic. Max Zahn, ABC News, 29 Apr. 2023

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'systemic risk.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

First Known Use

1977, in the meaning defined above

Time Traveler
The first known use of systemic risk was in 1977

Dictionary Entries Near systemic risk

Cite this Entry

“Systemic risk.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/systemic%20risk. Accessed 25 Apr. 2024.

Legal Definition

systemic risk

noun
sys·​tem·​ic risk sis-ˈte-mik- How to pronounce systemic risk (audio)
: the risk that the failure of one financial institution (as a bank) could cause other interconnected institutions to fail and harm the economy as a whole
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