Systemic Risk

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Definition

Systemic Risk denotes any Risk Type that is (or may become) pervasive across the entire system being analyzed.

Causes

Systemic risk emerges as a negative design feature of systems that are

  • too homogeneous (the same Risk Factor may simultaneously affect large number of entities
  • too interconnected (an initial Risk Event affecting one unit propagates / amplifies to other units)

Examples

Issues and Challenges

See Also