Systemic risk

By:
Updated: Aug 20, 2021

Risk associated with the insufficient stability of a system, such as a market or financial system, caused by the existence of numerous links and interdependencies between the entities in the system, so that the inability of one or a few entities to perform their functions may lead to a cascade of failures of other entities and ultimately result in the collapse of the entire system. This should be distinguished from the systematic risk.

Reference: Oxford Press Dictonary of Economics, 5th edt.



Sources & references
Risk disclaimer
James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.