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

The Federal Reserve Bank of Boston recently pointed out that private credit could be a systemic risk to the financial system under a severe adverse scenario, which is exactly what the stress tests are supposed to test for. —Alicia Adamczyk, Fortune, 28 June 2025

Tightening this layer improves resilience—without extra spending—by minimizing blind spots and reducing systemic risk. —Expert Panel®, Forbes.com, 24 June 2025

However, a recent Federal Reserve report found that private credit poses limited systemic risk. —Jamal Hagler, Boston Herald, 15 June 2025

Agency decay — the gradual erosion of human decision-making capabilities — poses a systemic risk as employees become overly dependent on AI recommendations. —Cornelia C. Walther, Forbes.com, 6 June 2025

Word History

First Known Use

1977, in the meaning defined above

Rhymes for systemic risk

• videodisc
• basilisk
• bisque
• brisk
• disc
• disk
• fisc
• fisk
• frisk
• whisk

Legal Definition

systemic risk

noun

sys·​tem·​ic risk sis-ˈte-mik- 

: 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