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

Example Sentences

Recent Examples on the Web

Treasury Secretary Janet Yellen and other top regulators on Friday announced a proposal to strengthen federal oversight of nonbanks that pose systemic risk. —Zachary Halaschak, Washington Examiner, 21 Apr. 2023

Some outside experts had been seriously skeptical that SVB’s collapse posed a systemic risk. —Jeff Stein, Anchorage Daily News, 13 Mar. 2023

Blankfein said the government wasn’t helping out based on what groups of depositors were affected, but because of systemic risk for the entire banking system. —Ramishah Maruf, CNN, 19 Mar. 2023

Over 650 firms—including prominent names like General Catalyst, Bessemer, and Lux Capital—recommended that their companies keep or return their money to SVB, despite an ongoing public conversation about the systemic risk of aggregating startup capital into a single bank. —WIRED, 18 Mar. 2023

There is no systemic risk, but there is a risk on consolidation. —Melissa Quinn, CBS News, 12 Mar. 2023

One potential option could be to use the FDIC’s systemic risk exception tool to backstop the uninsured deposits at SVB. —Jesse Pound, NBC News, 10 Mar. 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, 25 Mar. 2023

But like the S&Ls of the ‘80s, the recent failures of SVB, as well as Silvergate Bank and Signature Bank, add up to the loss of regional institutions that, taken together, posed such a systemic risk that D.C. put taxpayer money on the line. —Will Daniel, Fortune, 21 Mar. 2023

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Word History

First Known Use

1977, in the meaning defined above

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