Managing Systemic Risk

Constanþa Chitiba ()
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Constanþa Chitiba: "Dimitrie Cantemir" Christian University

Knowledge Horizons - Economics, 2012, vol. 4, issue 3-4, 43-47

Abstract: Today, world faces ever-greater concerns regarding global financial risks, the prospect of rapid contagion through increasingly connected financial systems and the threat of disastrous financial impacts. One of the most important forms of financial risks is the systemic risk which we are confronted more and more. Systemic risk is a relatively new term that has its origin in policy discussions more than in the professional economics and finance literature. Systemic risk is the risk of collapse of an entire financial system or entire market and refers to the risks imposed by inter-linkages and interdependencies in a system or market where the failure of a single entity or cluster of entities can cause a cascading failure which could potentially bankrupt or bring down the entire system or market. Taking into consideration the above mentioned facts it is compulsory to drawn up a new regulation in order to mitigate systemic risk and its consequences.

Keywords: Financial risk; specific regulations; capital markets; systemic risk fund (search for similar items in EconPapers)
JEL-codes: P34 P45 (search for similar items in EconPapers)
Date: 2012
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