systemic risk


Definition of systemic risk

: 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 Market-making was never a systemic risk, and there is simply no way that the Fed’s liquidity measures would have been needed this past spring if banks had not been forbidden from participating in this silo of capital markets. Andrew Stuttaford, National Review, "The Capital Letter: Week of November 16," 21 Nov. 2020 The Federal Reserve this week cited climate change as a systemic risk to the financial system and to assets such as coastal real estate. Irina Ivanova, CBS News, "Biden doesn't need Congress to step up the fight against climate change," 12 Nov. 2020 The Shanghai Stock Exchange's announcement comes just over a week after Ma said avoiding systemic risk is important, but publicly criticized Chinese regulators for stifling innovation by being too risk averse. Sherisse Pham, CNN, "Beijing just yanked Ant Group's IPO to show Jack Ma who's really in charge," 4 Nov. 2020 Financial products that could bring systemic risk to China’s financial systems will still be curtailed. Jacky Wong, WSJ, "Chinese Fintech Is Hot. Regulators Could Still Cool It Down," 16 Oct. 2020 The election uncertainty didn’t create a systemic risk for the US or undermine faith in the US dollar as a store of value. John Detrixhe, Quartz, "If Trump loses but won’t concede, how will the markets react?," 26 Sep. 2020 But the one that offers perhaps the brightest glimmer of hope is a landmark report from a federal regulator on the systemic risk climate change poses to the U.S. financial markets. Eamon Barrett, Fortune, "Systemic shocks: the U.S. financial market is under threat from climate change," 10 Sep. 2020 Its reluctance to treat climate change as a systemic risk is infamous. Kate Aronoff, The New Republic, "A Novel Way to Fund a Green Economy," 14 Aug. 2020 The junk bond market may not satisfy another criteria for bailouts: systemic risk. John Detrixhe, Quartz, "As the economy plunges, debate is growing over a bailout for junk bonds," 8 Apr. 2020

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'systemic risk.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of systemic risk

1977, in the meaning defined above

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Time Traveler for systemic risk

Time Traveler

The first known use of systemic risk was in 1977

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Statistics for systemic risk

Last Updated

28 Nov 2020

Cite this Entry

“Systemic risk.” Dictionary, Merriam-Webster, Accessed 18 Jan. 2021.

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More Definitions for systemic risk

systemic risk

sys·​tem·​ic risk | \ sis-ˈte-mik- How to pronounce systemic risk (audio) \

Legal Definition of systemic risk

: 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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