Systemic Risk

What is Systemic Risk?

Systemic Risk meaning The risk that a default by one market participant will have repercussions on other participants due to the interlocking nature of financial markets. For example, Customer A’s default in X market may affect Intermediary B’s ability to fulfill its obligations in Markets X, Y, and Z.

 

reference: U.S. COMMODITY FUTURES TRADING COMMISSION – CFTC Glossary