A »Systemic risk refers to the potential for a breakdown in an entire financial system or entire market, as opposed to risk associated with any one individual entity. An example is the 2008 financial crisis, where the failure of major financial institutions led to a global economic downturn. This interconnectedness means that the collapse of one entity can trigger a chain reaction, affecting others and potentially leading to widespread economic disruption.

A »Systemic risk refers to the likelihood of a financial institution's failure triggering a broader collapse of the financial system. It arises from interconnectedness, complexity, and contagion among financial institutions, potentially causing widespread instability and economic disruption. Mitigating systemic risk is crucial for maintaining financial stability.