SYSTEMIC RISK

The Systemic Risk Centre (SRC) was set up to study the risks that may trigger the next financial crisis and to develop tools to help policymakers and financial institutions become better prepared... It is important to distinguish between systemic and one-off, or idiosyncratic, risks. An idiosyncratic shock will affect only a single institution or asset and will not ripple out into the rest of the system. Systemic risk focuses on the danger of the entire financial system collapsing, causing a major downturn in the real economy. The consequences of a systemic financial crisis are more devastating than those of crises in other economic sectors because of the role that finance plays in the economy.

Primary location: Street United Kingdom