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

Allowing these systemic risks to fester will only make a coastal real estate crash more cataclysmic. Patrick Sisson, Curbed, "Climate change and the coming coastal real estate crash," 16 Oct. 2018 Federal financial regulators have begun rolling out a plan to provide regulatory relief to smaller regional banks no longer considered a systemic risk, as part of a much larger deregulatory package recently passed by Congress. Tory Newmyer, Washington Post, "The Finance 202: Voters already fear economic pain from Trump's trade war," 9 July 2018 The financial supervision system will be improved to ensure financial stability and prevent systemic risk, the official Xinhua News Agency reported late Sunday, citing a decision by a Communist Party committee on deepening government reform., "China Plans Greater Economic Policy Coordination," 4 Mar. 2018 By late 2016, insurers had fallen under the spotlight as Chinese leaders tried to control capital outflows and began to openly fret that the financial system was building debt too rapidly and creating systemic risks. James T. Areddy, WSJ, "Fired Chinese Insurance Regulator Charged With Bribery, Abuse of Power," 16 Apr. 2018 Regulators have described Anbang’s blazing expansion as a potential systemic risk to the country’s financial system. Stella Yifan Xie, WSJ, "Anbang Insurance Founder’s Stunning Fall Ends With 18-Year Prison Term," 10 May 2018 There are lots of places to chip away at Dodd-Frank, until the changes add up to systemic risk. Kimberly Harrington, The New Yorker, "The Dangers of Undoing Dodd-Frank," 24 July 2017 China will prioritize problems that threaten economic stability and lead to systemic risks, Xinhua said, adding that Xi chaired the meeting., "China's Xi Turns Deleveraging Sights on Local Governments, SOEs," 3 Apr. 2018 Most recently, it was discovered that Bitfinex was closely linked to a cryptocurrency called Tether, a relationship some argued exposes the entire cryptocurrency market to systemic risk. David Z. Morris, Fortune, "Kraken Bitcoin Exchange Reopens After Two Anxious Days," 14 Jan. 2018

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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Last Updated

19 Nov 2018

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The first known use of systemic risk was in 1977

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systemic risk

sys·​tem·​ic risk | \sis-ˈte-mik- \

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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