systemic risk

Definition of "systemic risk"
  1. The possibility that the collapse of a single financial organization like a bank might lead to the failure of other related institutions, damaging the broader economy
How to use "systemic risk" in a sentence
  1. The financial crisis of 2008 was a real-world example of systemic risk, with the failure of one bank leading to widespread economic struggles.
  2. Regulations aim to mitigate systemic risk in the financial sector to prevent a domino effect that could harm the economy.
  3. The collapse of a large, interconnected financial institution could create systemic risk.

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